Consider Two Bonds,Bond a and Bond B,offered for Sale in the Same

question 27

Multiple Choice

Consider two bonds,Bond A and Bond B,offered for sale in the same market for financial assets: - Bond A has a face value of $1000,a market price of $971,and matures in one year.
- Bond B has a face value of $1000,a market price of $926,and matures in one year.
Which of the following statements about Bonds A and B are correct?

• A)Bond B has a higher present value than Bond A.
• B)Bond A has a lower present value than Bond B.
• C)The yield on Bond B is 3%; the yield on Bond A is 3%.
• D)The yield on Bond A is 3%; the yield on Bond B is 8%.
• E)There is a disequilibrium in this market for financial assets.

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