Three $1,000 face value, 10-year, noncallable, bonds have the same amount of risk, hence their YTMs are equal.

Published by admin at September 8, 2023

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Three $1,000 face value, 10-year, noncallable, bonds have the same amount of risk, hence their YTMs are equal. Bond 8 has an 8% annual coupon, Bond 10 has a 10% annual coupon, and Bond 12 has a 12% annual coupon. Bond 10 sells at par. Assuming that interest rates remain constant for the next 10 years, which of the following statements is CORRECT

Three $1,000 face value, 10-year, noncallable, bonds have the same amount of risk, hence their YTMs are equal.

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