A. Since they are both have a 3-year maturity, they are equal in price

9. For each of the following pairs of Govemment of Canada Bonds, dentify which will have the higher price as a percentage of the face value. a. A three-year zero-coupon bond or a five-year zero-coupon bond? b. A three-year zero-coupon bond or a three-year 4% coupon bond? c. A two-year 5% coupon bond or a two-year 6% coupon bond? a. Which will have the higher price (as a percentage of the face value) , a three-year zero-coupon bond or a five-year zero-coupon bond? O A. A 5-year, because the future value is received later, the present value is higher. O B. A 5-year, because the present value is received sooner, the future value is higher. O C. A 3-year, because the future value is received sooner, the present value is higher. O D. A 3-year, because the present value is received sooner, the future value is higher. b. Which will have the higher price (asa percentage of the face value), a three-year zero-coupon bond ora three-year 4% coupon bond? O A. Since they are both have a 3-year maturity, they are equal in price. O B. The 4% coupon bond, because the 4% coupon bond pays interest payments; whereas the zero-coupon bond is a pure discount bond. O C. The zero-coupon bond, because the zero-coupon bond pays interest payments. O D. The zero-coupon bond, because a pure discount bond pays higher interest payments than a 4% coupon bond. c. Which will have the higher price (as a percentage ofthe face value), a two-year 5% coupon bond ora two-year coupon bond, both issued on the same date? The 6% coupon bond, because the coupon (interest) payments are higher, even though the timing is the same. The 5% coupon bond, because the future value will be received sooner, therefore the present value must be higher. The 5% coupon bond, because the coupon (interest) payments are higher, even though the timing is the same. Because they are both for two years, they are equal in price.