Question: Bond A and B are identical except that Bond B has a lower bond rating, which means it has greater default risk. Which of the

Bond A and B are identical except that Bond B has a lower bond rating, which means it has greater default risk. Which of the following statements is correct?

Bond A will have a lower value than bond B.

Bond B will have a higher YTM than Bond A

Bond A and Bond B will have the same value because they are identical except for default risk.

None of the above.

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