Question: Consider two bonds, A and B. Both bonds presently are selling at their par value of $1,000. Each pays interest of $50 annually. Bond A
Consider two bonds, A and B. Both bonds presently are selling at their par value of $1,000. Each pays interest of $50 annually. Bond A will mature in 15 years, while bond B will mature in 5 years. If the yields to maturity on the two bonds change from 6% to 8%. a) both bonds will not change in value. b) both bonds will decrease in value but bond A will decrease more than bond B c) both bonds will decrease in value but bond B will decrease more than bond A
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