Jeffrey Corp.Bonds have a current yield of 7% and mature in 10 years.Jones Corp.Bonds have a current yield of 5% and mature in 10 years.Given this information,which of the following statements is most correct?
A) Jeffrey Corp. Bonds will have a higher yield to maturity than Jones Corp. Bonds.
B) Jones Corp. Bonds will sell for a lower price than Jeffrey Corp. Bonds.
C) Jones Corp. Bonds are riskier than Jeffrey Corp. Bonds.
D) If both bonds have the same yield to maturity, then the price of Jones Corp. Bonds must be less than the price of Jeffrey Corp. Bonds.
Correct Answer:
Verified
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