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please explain why 12. Two equally risky bonds are priced to yicld a total retum (YTM) of 8%. One bond has an annual coupon of
please explain why
12. Two equally risky bonds are priced to yicld a total retum (YTM) of 8%. One bond has an annual coupon of 6%, matures in 10 years and is currently priced at $865.80. The other bond has an annual coupon of 10%, matures in 10 years and is eurrently priced at $1,134.20. Based on this information (and as discussed in class), which bond would you prefer to invest in? A. You would prefer the first bond because it has a lower price. B. You would prefer the second bond because it has a higher coupon payment. C.You don't like bonds and would not buy either one. D.You should be indifferent between the bonds since they are both priced to yield 8%. E. You cannot decide because we did not talk about this in class Step by Step Solution
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