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Bond A and Bond B are identical (same risk, maturity, par value, and coupon rate, etc.), except Bond A pays coupons semiannually and Bond B
Bond A and Bond B are identical (same risk, maturity, par value, and coupon rate, etc.), except Bond A pays coupons semiannually and Bond B pays once per year. If both bonds sell for the same price, which one will have the larger yield to maturity?
a) Bond A | ||
b) Bond B | ||
c) Neither--both bonds will have the same yield to maturity. | ||
d) Impossible to determine without more information. |
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