Question: . Consider the two bonds described here: Bond A Bond B Maturity 15 yrs 20 yrs Coupon Rate 10% 6% (Paid semiannually) Par Value $1,000

. Consider the two bonds described here:

Bond A Bond B

Maturity 15 yrs 20 yrs

Coupon Rate 10% 6%

(Paid semiannually)

Par Value $1,000 $1,000

If both bonds had a required return of 8%, what would the bonds prices be?
Which bond is selling at a premium and which is selling at a discount?
If the required return on the two bonds rose to 10%, what would the bonds prices be?

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