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Business, 27.04.2021 20:20 kendra95

An investor owns three $1,000 face value bonds. Each of these bonds are 15-year, noncallable, bonds and each has the same amount of risk associated with it and therefore their YTMs are equal. Bond 9 has an 9% annual coupon, Bond 10 has a 10% annual coupon, and Bond 11 has a 11% annual coupon. Bond 10 sells at par. If interest rates stay constant for the next 15 years, which of the following statements is CORRECT? Group of answer choices Over the next year, Bond 9's price is expected to decrease, Bond 10's price is expected to stay the same, and Bond 11's price is expected to increase. Bond 11 sells at a premium (its price is greater than par), and its price is expected to increase over the next year. Bond 9 sells at a discount (its price is less than par), and its price is expected to increase over the next year. Bond 9's current yield will increase each year. Since the bonds have the same YTM, they should all have the same price, and since interest rates are not expected to change, their prices should all remain at their current levels until maturity.

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An investor owns three $1,000 face value bonds. Each of these bonds are 15-year, noncallable, bonds...
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