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Assume that a 30-year coupon bond issued by U.S. Treasury has a 8% annual coupo while a 20-year Treasury bond has an 10% annual coupon.

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Assume that a 30-year coupon bond issued by U.S. Treasury has a 8% annual coupo while a 20-year Treasury bond has an 10% annual coupon. Assume also that the yiel curve is upward sloping, meaning that the yield to maturity increases with the increas of maturity of Treasury securities. Which of the following statements is CORRECT? The 30-year bond must be priced below the 20-year bond. O The 30-year bond must be priced above the 20-year bond. O It is possible that under some market conditions, 30-year bond is priced below par value while the 20-year bond is priced above par value. O It is possible that under some market conditions, the 20-year bond is priced below par while the 30-year bond is priced above par Holding all factors constant, if the interest rate decreases by 1 %, it is not clear which bond will experience a bigger price change

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