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Given two pairs of securities which pair (select one from group A and one from group B) should sell at a greater price? A. An

Given two pairs of securities which pair (select one from group A and one from group B) should sell at a greater price?

A. An 8-year Treasury bond with a 10.25% coupon rate or an 8-year T-bond with a 9.25% coupon.

1.) An 8-year T-bond with a 9.25% coupon

2.) An 8-year Treasury bond with a 10.25% coupon rate

B. A four-month expiration call option with an exercise price of $36 or a four-month call on the same stock with an exercise price of $41.

1.) A four-month expiration call option with an exercise price of $36

1.) A four-month call on the same stock with an exercise price of $41

A.

The 8-year Treasury bond with a 10.25% coupon rate and the call with the lower exercise price: The expiration call with the exercise price of $36.

B.

The 8-year Treasury bond with a 10.25% coupon rate and the call with the higher exercise price: The expiration call with the exercise price of $41.

C.

The 8-year Treasury bond with a 9.25% coupon rate and the call with the higher exercise price: The expiration call with the exercise price of $41.

D.

The 8-year Treasury bond with a 9.25% coupon rate and the call with the lower exercise price: The expiration call with the exercise price of $36.

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