Question: 7 . Consider the same two bonds below. If we switch the payment frequency from annual to semiannual ( there is no change in interest

7. Consider the same two bonds below. If we switch the payment frequency from annual to semiannual (there is no change in interest rates), what will happen to the price of each bond? That is, will bond As price increase, decrease, or stay the same? What about Bs price? Can you explain your result?
A B
Coupon 10%3%
Years to Maturity 1010 Yield to Maturity 7%7% Price $1210.71 $719.06 Payment annual annual
4

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