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3 ond A has a 9 % annual coupon, while Bond B has a 7 % annual coupon. Both bonds have the same maturity, a
ond A has a annual coupon, while Bond B has a annual coupon. Both bonds have the same maturity, a face value of $ an yield to mat nd are noncallable. Which of the following statements is CORRECT?
a Bond A trades at a discount, whereas Bond B trades at a premium.
b If the yield to maturity for both bonds remains at Bond As price one year from now will be higher than it is today, but Bond Bs price one year from now W lower than it is today.
c If the yield to maturity for both bonds immediately decreases to Bond As bond will have a larger percentage increase in value.
d Bond As current yield is greater than that of Bond
e Bond As capital gains yield is greater than Bond Bs capital gains yield.
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