Question: Bond X & Bond Y are issued by the same company. Each bond has a maturity value of $100,000 & each pays a stated rate
Bond X & Bond Y are issued by the same company. Each bond has a maturity value of $100,000 & each pays a stated rate of interest of 8%. Current market rate of interest is 8% for each. Bond X matures in 7 years while Bond Y matures in 10 years. Which of the following is correct? A) Both bonds will sell for the same amount. B) Both bonds will sell for more than $100,000. C) Bond X will sell for more than Bond Y. D) Bond Y will sell for more than Bond X.
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