Given the following bond information: Issuer, coupon, maturity, price and yield:
Ontario 3.150 2022-Jun-02 99.00 3.28
Bombardier 7.350 2024-Dec-22 107.00 6.56
What can you say about these bonds?

Question

Quizplus · Accepted Answer

The higher yield on the Bombardier bond indicates that investors perceive it to have a higher risk premium compared to the Ontario bond, which has a lower yield. The coupon rates and yields do not illustrate the liquidity preference theory, which suggests that investors prefer shorter-term bonds with lower risk. The coupon rate on the Ontario bond is actually 3.15 percent, not 6.3 percent, and the yield on the Ontario bond is 3.28 percent, not 3.3 percent.

Given the Following Bond Information: Issuer, Coupon, Maturity, Price and Yield