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You notice RW, Inc has the following bonds outstanding. All have a maturity of three years, the same credit rating, and are pari passu (meaning
You notice RW, Inc has the following bonds outstanding. All have a maturity of three years, the same credit rating, and are pari passu (meaning equal in priority).
Bond | Coupon | Special provisions |
A | 4.00% | Option-free bond |
B | 4.00% | Callable at par at the end of years 1 and 2 |
C | 4.00% | Putable at par at the end of years 1 and 2 |
D | 1-year LIBOR | Floating rate bond |
All else being equal, which bond (A, B, or C) do you expect will be priced the highest?
Group of answer choices
Bond A
Bond B
Bond C
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