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Author Question: Three $1,000 face value bonds that mature in 20 years have the same level of risk, hence their YTMs ... (Read 30 times)

ksmithunr

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on: Aug 7, 2023
Three $1,000 face value bonds that mature in 20 years have the same level of risk, hence their YTMs are equal. Bond A has a 15% annual coupon, Bond B has a 13% annual coupon, and Bond C has a 12% annual coupon. Bond B sells at par. Assuming interest rates remain constant for the next 20 years, which statement about these bonds is true?

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The required return on all these bonds is 15%.


◦

Bond A sells at a premium (its price is greater than par), and its price is expected to decrease over the next year.


◦

Bond C sells at a discount (its price is less than par), and its price is expected to decrease over the next year.


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Over the next year, the prices of Bonds A, B, and C are expected to remain at their current levels until maturity since they have the same YTM.

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

Harsh06

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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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ksmithunr

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Reply 2 on: Aug 7, 2023
Excellent

mcarey591

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Reply 3 on: Yesterday
:D TYSM

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