Question: On May 1 , 2 0 1 9 , Miquel is considering one of the following newly issued 1 0 - year AAA corporate bonds.

On May 1,2019, Miquel is considering one of the following newly issued 10-year AAA corporate bonds.
Description Coupon Price Callable Call Price
Wildwood, due May 1,20275.0% $100 noncallable NA
Asbury, due May 1,20275.4% $100 currently callable $102
Suppose market interest rates decline by 100 basis points (i.e.,1%). The effect of this decline would be the price of the Wildwood bond would __________blank.
Multiple Choice
decline by more than the price of the Asbury bond
increase by less than the price of the Asbury bond
decline by less than the price of the Asbury bond
increase by more than the price of the Asbury bond

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