Question: Consider two bonds x and y, both with face value 100, coupon rate 10%, and maturity of 1 year. Assume that the interest rate is

Consider two bonds x and y, both with face value 100, coupon rate 10%, and maturity of 1 year. Assume that the interest rate is 10%. Assume that bond y will go into default on both the principal and interest payments with probability 50%. Suppose that prices equal the expected discounted payments. What is the difference in the yields to maturity? I (a) The yields to maturity are the same. (b) 110 (c) 120. (d) 10. (e) 12

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