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Author Question: Bond A has a 7% annual coupon, while Bond B has a 13% annual coupon. Both bonds have the same ... (Read 101 times)

Labomba

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on: Aug 7, 2023
Bond A has a 7% annual coupon, while Bond B has a 13% annual coupon. Both bonds have the same maturity, a face value of $1,000, and a 10% yield to maturity. Which of the following statements is correct?

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If the yield to maturity for both bonds immediately decreases to 8%, Bond A’s bond will have a larger percentage increase in value. 


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Bond A trades at a premium, whereas Bond B trades at a discount.


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Bond A’s current yield is greater than that of Bond B.


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Bond A’s capital gains yield is less than Bond B’s capital gains yield.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Labomba on Aug 7, 2023

Tester

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Labomba

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review

Chelseyj.hasty

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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