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Bond Return 7: You consider buying one of two very similar $1,000-face 10%-coupon bonds that have five years of remaining maturity. Rates are 10%. Youve

Bond Return 7: You consider buying one of two very similar $1,000-face 10%-coupon bonds that have five years of remaining maturity. Rates are 10%. Youve estimated that Bond A has a default probability of 5% while Bond B has no default probability. If both bonds were trading at Par, there would be ____ for Bond A, _______ for bond B, and spreads will ______

excess demand; excess supply, rise

excess demand; excess supply, fall

excess supply; excess demand, rise

excess supply; excess demand, fall

None of the above

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