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Bond A has a coupon rate of 6%, and has 15 years remaining until maturity. Bond B has a coupon rate of 12%, and also
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Bond A has a coupon rate of 6%, and has 15 years remaining until maturity. Bond B has a coupon rate of 12%, and also has 15 years remaining until maturity. We can say that:
Bond Bs price is probably more sensitive to changes in interest rates.
Bonds A and B were issued by the same company (as they have the same maturity).
The company issuing Bond A is financially weaker than the company issuing Bond B.
Bond As price is probably more sensitive to changes in interest rates.
The company issuing Bond A has the greater chance of bankruptcy.
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