Question: Consider the 2 bonds (A & B) **B is bond on the right** Bond A Price $1,000 $1,000 Par value $1,000 $1,000 Annual Interest Payment

Consider the 2 bonds (A & B) **B is bond on the right**

Bond A
Price $1,000 $1,000
Par value $1,000 $1,000
Annual Interest Payment $90 $90
Maturity 17 years 28 years

If the yields to maturity on the two bonds change from 9% to 10%, which of the following Is true

both bonds will increase in value, but bond A will increase more than bond B.

both bonds will decrease in value, but bond A will decrease more than bond B.

both bonds will increase in value, but bond B will increase more than bond A

both bonds will decrease in value, but bond B will decrease more than bond A

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