Bond X and Bond Y Both Are Issued by the Same

question 102

Multiple Choice

Bond X and bond Y both are issued by the same company. Each of the bonds has a maturity value of $100,000 and each pays interest at 8%. The current market rate of interest is 8% for each. Bond X matures in 7 years while bond Y matures in 10 years. Which of the following is correct?

• A) Both bonds sell for the same amount.
• B) Both bonds sell for more than $100,000.
• C) Bond X sells for more than bond Y.
• D) Bond Y sells for more than bond X.

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