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Bond A and bond B both pay annual coupons, mature in 8 years, have a face value of $1000, pay their next coupon in 12

Bond A and bond B both pay annual coupons, mature in 8 years, have a face value of $1000, pay their next coupon in 12 months, and have the same yield-to-maturity. Bond A has a coupon rate of 6.5 percent and is priced at $1,056.78. Bond B has a coupon rate of 7.4 percent. What is the price of bond B?

c.

$1,056.78 (plus or minus $4)

a.

$1,113.56 (plus or minus $4)

b.

$1,001.91 (plus or minus $4)

c.

$1,056.78 (plus or minus $4)

d.

$1,000.00 (plus or minus $4)

e.

None of the above is within $4 of the correct answer -

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