If the following bonds are identical except for coupon, what is the price of bond B?

Question

Quizplus · Accepted Answer

Since the bonds are identical except for coupon, the bond with the lower coupon will have a lower price. Bond A has the lowest coupon at 4%, so it will have the lowest price. Bond B has a coupon of 6%, which is higher than Bond A's coupon but lower than Bond C's coupon. Bond C has the highest price, so Bond B's price must be between Bond A's price and Bond C's price. The only answer choice between $901.04 and $1,037.86 is $925.31, which is therefore the price of Bond B.

If the Following Bonds Are Identical Except for Coupon, What