Consider two bonds, A and B without default risk. They both have a YTM 10%, three years until maturity time, and a face value of $1000. Bond A is a premium bond and bond B is a discount bond. Assume that YTM remains at 10% for both bonds throughout the next yearWhich of the following statement is correct?

A) Bond A price will decrease over the next year and Bond B price will increase over the next year .

B) Bond A's coupon rate is less than bond B's coupon rate next year.

C) Bond A and Bond B will become par bonds at the end of the next year.

D) The holding period return of bond A over the next year is higher than the holding period return of bond B over the next year

E) Investors will strictly prefer bond A to bond B.

F) None of the above.

5. (3 points) Consider two bonds, A and B without default risk. They both have a YTM of 10%, three years until maturity time, and a face value of $1000. Bond A is a premium bond and bond B is a discount bond. Assume that YTM remains at 10% for both bonds throughout the next year. Which of the following statement is correct? A) Bond A price will decrease over the next year and Bond B price will increase over the next ycar. B) Bond A's coupon rate is less than bond B's coupon rate next year. C) Bond A and Bond B will become par bonds at the end of the next year. D) The holding period return of bond A over the next year is higher than the holding period return of bond B over the next year. E) Investors will strictly prefer bond A to bond B. F) None of the above