Suppose the yield-to-maturity on all 5-year bonds is 2.25%. Now consider two bonds that each have a par value of $1,000, pay coupons semi-annually, and have a maturity of 5 years. Agree or disagree: if bond A pays a coupon of 2.75%/year, and bond B pays a coupon of 4.25%/year, then bond B will have a higher price.

a) Disagree

b) Agree