Quiz Ch 07 – Bond Selection and Price Expectation

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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An investor is evaluating two 10-year, $1,000 face value, noncallable bonds: Bond A has a 7% annual coupon, and Bond B has a 9% annual coupon. Both bonds yield 8% to maturity, expected to remain constant for a decade. Which statement is TRUE?

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