First, you have to do problem 4-9 using a financial calculator

From these calculations, the future value of Bond B is greater than Bond A and the present value of Bond B is greater than Bond A. Bond IRR PV FV A 14.5% 996 1512 B 13.9 1000 1518 It is clear from this example that Bond B is a superior investment to Bond A. If we vary the shape of the term structure, then the IRR rule will not always work. ................
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