Assume You Are Considering Two Bonds Identical in Every Way

question 276

True/False

Assume you are considering two bonds identical in every way but for coupon frequency-bond A pays interest annually, and bond B pays interest semi-annually. Then, if they have the same price, the yield-to-maturity on bond A will always be greater than that on bond
B.

---

Definitions:

Agent

Someone who is authorized to act on behalf of another person (the principal), especially in business or legal matters.

Apparent Authority

A situation where a person appears to have the authority to act on behalf of another person or company, leading others to rely on that apparent authority.

Durable Power

Refers to a legal document granting someone else the authority to act on your behalf in specific legal and financial matters, even after you become incapacitated.

Uniform Durable Power

A legal document that grants one person (the agent) the authority to act on behalf of another (the principal) in a wide range of matters and remains in effect even if the principal becomes incapacitated.