Question: Company ABC and XYZ have the same risks, and both have bonds that mature in 8 years. ABC has a bond that pays 7% coupon

Company ABC and XYZ have the same risks, and both have

Company ABC and XYZ have the same risks, and both have bonds that mature in 8 years. ABC has a bond that pays 7% coupon while XYZ pays 5% coupon. The YTM is 8%. Which of the following statement is correct? ABC's bond should be selling for a premium And XYZ bonds should be selling for the same price XYZs bond should be selling for a premium. XYZ's bond should be selling for a higher price than the ABC's bond, XYZ's bond should be selling for a lower price than the ABC's bond

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