Question: (Practice Problem) Bond A and Bond B are identical except for their ratings. Both mature 20 years from now, have par values of $1,000 and

(Practice Problem) Bond A and Bond B are identical except for their ratings. Both mature 20 years from now, have par values of $1,000 and make semi-annual coupon payments based on coupon interest rates of 5%. If Bond A is rated AA and Bond B is rated B, which statement below is correct?

A. Bond As yield to maturity will be higher than Bond Bs yield to maturity

B. Bond As yield to maturity will be the same as Bond Bs yield to maturity

C. Bond As yield to maturity will be the same as Bond Bs yield to maturity

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