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Two bonds have par values of $1,000. One is a 4%,19-year bond priced to yield 8.5%.The other is a(n) 8%, 22-year bond priced to yield
Two bonds have par values of $1,000. One is a 4%,19-year bond priced to yield 8.5%.The other is a(n) 8%, 22-year bond priced to yield 6.0%. Which of these two has the lower price? (Assume annual compounding in both cases.)
The price, PV, of the 4%, 19-year bond is $
The price, PV, of the 8%, 22-year bond is $
Which of these two has the lower price?
a) The 4%, 19-year bond has lower price of $582.95
b) The 8%, 22-year bond has a lower price of $582.95
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