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Bond A is a 10-year annual coupon bond with 5% coupon rate and 7.2% yield rate. Bond B is also a 10-year annual coupon bond,
Bond A is a 10-year annual coupon bond with 5% coupon rate and 7.2% yield rate. Bond B is also a 10-year annual coupon bond, but with 5.5% coupon rate, 7.7% yield rate. Both bonds have face value $100, and are redeemable at par. Without calculating the numerical values, compare their prices with the aid of the premium/discount formula. [4]
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