4.1.11 Bond A has n coupons remaining at rate r each, and sells to yield...
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4.1.11 Bond A has n coupons remaining at rate r each, and sells to yield rate i effective per coupon period. Bond B has the same face val- ue and number of coupons remaining as Bond A, but the coupons are at rate r2 each and the yield rate is in effective per period. If i2.n = i;. r2 and i2 > i>n, which of the following statements are true? I. The price of Bond B exceeds the price of Bond A. II. The present value of Bond B's coupons on the purchase date exceeds the present value of Bond A's coupons. III. The present value of the redemption amount for Bond B ex- ceeds the corresponding present value for Bond A. 4.1.11 Bond A has n coupons remaining at rate r each, and sells to yield rate i effective per coupon period. Bond B has the same face val- ue and number of coupons remaining as Bond A, but the coupons are at rate r2 each and the yield rate is in effective per period. If i2.n = i;. r2 and i2 > i>n, which of the following statements are true? I. The price of Bond B exceeds the price of Bond A. II. The present value of Bond B's coupons on the purchase date exceeds the present value of Bond A's coupons. III. The present value of the redemption amount for Bond B ex- ceeds the corresponding present value for Bond A
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