3. Bond yields and prices over time

A bond investor is analyzing the following annual coupon bonds:

Issuing Company	Annual Coupon Rate
Johnson Enterprises	6%
Smith Incorporated	12%
Irwin Metalworks	9%

Each bond has 10 years until maturity and has the same risk. Their yield to maturity (YTM) is 9%. Interest rates are assumed to remain constant over the next 10 years. Identify the curves on the following graph to indicate the path that each bonds price, or value, is expected to follow.

A Smith downapper

b irwin straight

c johson upstare

A	Smith
B	Irwin
C	Johnson

Based on the preceding information, which of the following statements are true? Check all that apply.

Smiths bonds have the highest expected total return.

The current yield for Smiths bonds is greater than 9%.

The current yield for Smiths bonds is between 0% and 9%.

Irwins bonds are selling at par.

Johnson just registered and issued its bonds, which will be sold in the bond market for the first time. Johnsons bonds would be referred to as .