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) Bond B has a higher yield than Bond A.
D) Bond A has a higher yield than Bond B.
E) There is a disequilibrium in this market for financial assets.
Correct Answer:
Verified
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