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Question
Two bonds are identical except for their maturity. The bonds have a coupon rate that is greater than their yield to maturity. Which of the following is true when comparing the two bonds?A) The longer maturity bond has a greater premium (is priced farther above par).
B) The longer maturity bond has a smaller premium (is priced above par but closer to par).
C) The longer maturity bond has a greater discount (is priced farther below par).
D) The longer maturity bond has a smaller discount (is priced below par but closer to par).
Answer
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