Question: Consider the two bonds A and B Bond A Maturity 3 years , coupon rate 12 % , Par value $2000 Bond BMaturity 4 years

Consider the two bonds A and B

Bond A Maturity 3 years , coupon rate 12 % , Par value $2000

Bond BMaturity 4 years , coupon rate 8 % , Par value $2000

A) If both bonds had a required return of 10%, what would the bonds prices be?

B) Describe what it means if a bond sells at a discount, a premium, and at its par value. Are these two bonds selling at a discount, premium, or par?

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