Bond X and bond Y both are issued by the same company. Each of the bonds has a maturity value of $100,000 and each matures in 10 years. Bond X pays 8% interest while bond Y pays 9% interest. The current market rate of interest is 8%. Which of the following is correct?
A) Both bonds sell for the same amount.
B) Bond X sells for more than bond Y.
C) Bond Y sells for more than bond X.
D) Both bonds sell at a discount.

Question

Quizplus · Accepted Answer

Bond Y is issued at a premium. Bond X is issued at face value.

Bond X and Bond Y Both Are Issued by the Same