Consider two bonds (A and B) with different coupons and price, but otherwise identical. Par value $ 1000. Remaining maturity is 25 years. Coupons are yearly. The last coupon was paid just a second ago. There are 25 more coupons left.  CouponA = $ 20. CouponB= $ 30. The price difference is $ 140.9395 (one bond costs $ 140.9395 more than the other bond).  Ignore default risk.

5a) Price of A is?

5b) Price of B is ?

Answer rating: 100% (QA)

The price of a bond is the present value of its future cash flows which include coupon payments and ... View the full answer