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Consider these two 10-year bonds that are equivalent in all respects expect payment frequency: B Coupon 8% 8% Method semi-annual annual Price $1,000 ? YTM

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Consider these two 10-year bonds that are equivalent in all respects expect payment frequency: B Coupon 8% 8% Method semi-annual annual Price $1,000 ? YTM 8.00% ? A. If bond A is priced fairly and investors price bonds based upon effective annual yield, then which of the following statements is true? Bond B should also trade at a price equal to par. B. Bond B should trade at a discount to par. C. Bond B should trade a premium to par. Question Progress A

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