Assume that " ABC " Company and " XYZ " Company have similar $ 100,000 par value bond issues outstanding . The bonds are equally risky . However :

1)The ABC " Company bond has an annual coupon rate of 8 % and matures 20 years from today .

2). The " Company bond has a coupon rate of 8 % , with interest paid semiannually , and it also matures in 20 years .

XY * Z ^ n Based on the above - given information , the difference in the current market prices of the two bonds if the market rate is equal to 12 % should be equal