Assume an efficient capital market. Consider two default risk free bonds. Bond $A$ is a coupon bearing bond while bond $B$ is a zero

coupon bond. The coupon of $A$ is $7\%.$ The maturity of bond $A$ is $1$ year and the maturity of bond $B$ is $4$ years. Assume an increasing

term structure of interest rates. The one year spot rate $(r_1)$ is $2\mathrm{.}5\%.$

Which of the following statements is true?

The yield to maturity of bond A isthat of bond

equal toB

lower thanB

greater thanB