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QUESTION 8 Bonds X and Y are identical, including the risk class. The only difference between A and B is in the coupon payment as

QUESTION 8

Bonds X and Y are identical, including the risk class. The only difference between A and B is in the coupon payment as shown below.

Bond X Bond Y

Face value $1,000 $1,000

Annual Coupon Payment $120 $130

Payment Frequency Semiannual Annual

Years to maturity 15 15

Price $919.43 ?

What is the price of bond Y?

A.
$956.95

B.
$1,007.15

C.
$940.92

D.
$973.44

E.
$925.88

F.
$989.75

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