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Examine the following two bonds: Bond A's market value is $1,065, it pays an annual...

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Accounting

Examine the following two bonds:

Bond A's market value is $1,065, it pays an annual coupon of $70, and it will mature in 5 years, paying $1,000. The yield to maturity is 6 percent.

Bond B's market value is $,1040, it pays an annual coupon of $60, and it will mature in 3 years, paying $1,000. The yield to maturity is 5 percent.

Which of the bonds trades at a greater premium to its present value? ***Please show all work***

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