UESTION 18 1 points Save Answer Bonds A and B are 15-year, $1,000 face value bon
ID: 2798926 • Letter: U
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UESTION 18 1 points Save Answer Bonds A and B are 15-year, $1,000 face value bonds. Bond A has a 7% annual coupon, while Bond B has a 9% annual coupon. Both bonds have a yield to maturity of 89, which is expected to remain constant for the next 15 years which of the following statements is CORRECT? O a One year from now, Bond A's price will be higher than it is today O b. Both bonds have the same price today, and the price of each bond is expected to remain constant until the bonds mature. Oc. Bond B has a higher price than Bond A today, but one year from now the bonds will have the same price. ( d. Bond A has a higher price than Bond B today, but one year from now the bonds will have the same price. e Bond A's current yield is greater than 8%.Explanation / Answer
Option a
the above is the answer
as bond A will trade at discount now due to higher yield than coupon , that means its value will rise as the time period reduces keeping other costant.
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