which of the following conclusions regarding the bonds in Exhibit 4 is correct?
A) Bond 5 is relatively cheaper than Bond 6.
B) Bond 7 is relatively cheaper than Bond 6.
C) Bond 8 is relatively cheaper than Bond 7.

Question

Quizplus · Accepted Answer

Based on the Yield-to-Maturity (YTM) values in Exhibit 4, Bond 7 has a YTM of 6.31%, which is lower than Bond 6's YTM of 6.41%. Generally, lower yields indicate higher prices, so Bond 7 is relatively cheaper than Bond 6. Therefore, option B is the correct answer. Option A and C are incorrect because there is no direct comparison between Bond 5 and 6, and no direct comparison between Bond 7 and 8.

Which of the Following Conclusions Regarding the Bonds in Exhibit