The Blackwater just issued 12-year, 7% coupon bonds. Freshwater Enterprises just issued 12-year, 6% coupon bonds. Both bonds sold at par. Which one of the following statements is correct concerning these two bonds?

Select one:

a. The Freshwater bonds are more interest rate sensitive than are the Blackwater bonds.

b. The Blackwater bonds will sell at a discount when the market rate is 7%.

c. The Freshwater bonds had a higher current yield than the Blackwater bonds when they were issued.

d. The Blackwater just issued 12-year, 7% coupon bonds. Freshwater Enterprises just issued 12-year, 6% coupon bonds. Both bonds sold at par. Which one of the following statements is correct concerning these two bonds?

e. The Freshwater bonds will sell at a premium when the market rate is 8%.