Question: 10.) You are considering two bonds (A and B), both with $1,000 face value, 10% coupon rate, and 20 years remaining to maturity. They trade

10.) You are considering two bonds (A and B),
10.) You are considering two bonds (A and B), both with $1,000 face value, 10% coupon rate, and 20 years remaining to maturity. They trade at the same price of $600. Find the bonds' promised yields (YTMs) if : (a) bond A makes coupon payments annually. (b) bond B makes semi-annual coupon interest payments. (c) If these two bonds have the same risk and other characteristics, and you could buy just one of them, which would you prefer? (Further thought Q: Why? Are the yields you just calculated consistent with that preference?)

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