An 5% coupon bond with 20 years left to maturity issued by corporation A (paying semi-annual coupons) has a face value of $1000, with a current yield to maturity (market rate of interest) of 5%. An equivalent 5% coupon bond with 20 years left to maturity issued by corporation B (also paying semi-annual coupons) has a face value of $1000 and yield to maturity of 8%.

1. Which Statement is true? a) Bond A has a Lower price than face-value; bond B has a price equal to face-value b) Bond A has a Lower price than face-value; bond B has a lower price than face-value c) Bond A has a price equal to face-value; bond B has a price equal to face-value d) Bond A has a price equal to face-value; bond B has a lower price than face-value
2. The cash-flows promised by these bonds are the same, so what is the most likely reason these bonds have different yields to maturity? a) Bond A is a longer-term bond than bond-B b) Bond A was issued when interest rates were higher than when Bond B was issued c) The market perceives bond A as riskier than Bond B d) The market perceives bond B as riskier than Bond A