Please help? Frugala is pleased when Sylvestor puts
$2,000 into 10-year state bonds and $3,000
into 5-year AAA-rated bonds in Steady
Hand Hardware, Inc. He buys the four
state bonds at a 5 percent interest rate
and the three Steady Hand bonds at a
6.5 percent rate. Sylvestor also buys $1,500
worth of blue chip stocks, and $800 worth
of stock in a promising new sportswear
company that reinvests its earnings in
new growth.
1. (a) What is the maturity for each of the
bond groups Sylvestor buys?
(b) The coupon rate?
(c) The par value?
2. (a) Which of Sylvestor’s stocks are
traded over the counter?
(b) on the NYSE?
3. (a) Which of Sylvestor’s new
investments are municipal bonds?
(b) Corporate bonds?
4. For which bond purchase did Frugala
probably consult Standard & Poor’s or
Moody’s?
5. From which stock may Sylvestor expect
capital gains rather than dividends?