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Consider two bonds A and B, both of them are issued by one reputable company with both having both paying 10% coupon. For Bond A,
Consider two bonds A and B, both of them are issued by one reputable company with both having both paying 10% coupon. For Bond A, the time to maturity is 10 years and for bond B the time to maturity is 15 years. Having the concept of duration in mind, indicate and explain whether bond A would be priced to yield more than bond B. Clearly indicate if the last statement is correct or not. Explain your reasons
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