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Bonds for two companies were just issued: Short Corp. ' s bonds will mature in 5 years, and Long Corp. ' s bonds will mature
Bonds for two companies were just issued: Short Corp.s bonds will mature in years, and Long Corp.s bonds will mature in years. Both bonds promise to pay a semiannual coupon, they are not callable or convertible, and they are equally liquid. Further, assume that the Treasury yield curve is based only on expectations about future inflation, ie that the maturity risk premium is zero for Tbonds. Under these conditions, which of the following statements is correct?
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