You are considering two bonds. Bond A has a 5% annual coupon ...

[olsonmanny@gmail.com]

You are considering two bonds. Bond A has a 5% annual coupon while Bond B has an 11% annual coupon. Both bonds have an 8% yield to maturity, and the YTM is expected to remain constant. Which of the following statements is correct?

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The price of Bond B will decrease over time, but the price of Bond A will increase over time.

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The price of Bond A will decrease over time, but the price of Bond B will increase over time.

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The prices of both bonds will remain unchanged.

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The prices of both bonds will decrease over time, but the price of Bond B will decrease by more.

[psuniv]

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[olsonmanny@gmail.com]

Excellent

[brbarasa]

Thanks for the timely response, appreciate it