Question
Bond A and bond B have the same face value of $1,000, pay annual coupons with the next coupon due in 1 year, were issued
Bond A and bond B have the same face value of $1,000, pay annual coupons with the next coupon due in 1 year, were issued at the same time, and mature at the same time. Bond A has a yield-to-maturity of 2.96 percent and a coupon rate of 3.15 percent. Bond B has a yield-to-maturity of 7.35 percent and a coupon rate of 6.69 percent. Indicate which of the following statements is true.
Bond B was riskier than bond A when the bonds were issued | ||
Bond A was riskier than bond B when the bonds were issued | ||
Bond B was safer than bond A when the bonds were issued | ||
Bond A was safer than bond B when the bonds were issued | ||
The value of bond B is greater than the value of bond A | ||
Bond B is safer than bond A today | ||
Bond A is riskier than bond B today | ||
Bond A is safer than bond B today | ||
The value of bond A is greater than the value of bond B | ||
Bond B is riskier than bond A today |
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