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Bond A pays semi-annual coupons, pays its next coupon in 6 months, and matures in 4 years. Bond B pays annual coupons, pays its next
Bond A pays semi-annual coupons, pays its next coupon in 6 months, and matures in 4 years. Bond B pays annual coupons, pays its next coupon in 1 year, and matures in 7 years. Both bonds have a face value of $1000 and both bonds have the same yield-to-maturity. Bond A has a coupon rate of 13.60 percent and is priced at $1,024.45. Bond B has a coupon rate of 7.90 percent. What is the price of bond B?
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