Explain why are the bond prices for A and B different or the same? Explain your answer clearly?

 

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The table below shows information on two bonds. Based on the information in the table, answer the following questions.< Bond A B Face Value $1000 $1000¹ Coupon rate 8% paid annually 8% paid semi- annually Yield to Maturity 10% 10% Term to Maturity 34 34 The table below shows information on two bonds. Based on the information in the table, answer the following questions.< Bond A B Face Value $1000 $1000¹ Coupon rate 8% paid annually 8% paid semi- annually Yield to Maturity 10% 10% Term to Maturity 34 34

Answer rating: 100% (QA)

Answer Bond A has a coupon rate of 8 per year which means that the bondholder will receive an interest payment of 80 1000 x 8 twice a year The yield t... View the full answer