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Bond X has an 8% annual coupon and Bond Y has a 5% annual coupon. Both bonds have a 6% yield to maturity, and the
Bond X has an 8% annual coupon and Bond Y has a 5% annual coupon. Both bonds have a 6% yield to maturity, and the YTM is expected to remain constant. Which of the following statements is correct about the relationship between the prices of these bonds and the passage of time? a. The prices of both bonds will remain unchanged. b. The prices of both bonds will increase by 6% per year. c. The price of Bond X will decrease over time, but the price of Bond Y will increase over time. d. The price of Bond Y will decrease over time, but the price of Bond X will increase over time. e. The prices of both bonds will increase over time, but the price of Bond X will increase by more. Bond X has an 8% annual coupon and Bond Y has a 5% annual coupon. Both bonds have a 6% yield to maturity, and the YTM is expected to remain constant. Which of the following statements is correct about the relationship between the prices of these bonds and the passage of time? a. The prices of both bonds will remain unchanged. b. The prices of both bonds will increase by 6% per year. c. The price of Bond X will decrease over time, but the price of Bond Y will increase over time. d. The price of Bond Y will decrease over time, but the price of Bond X will increase over time. e. The prices of both bonds will increase over time, but the price of Bond X will increase by more
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