Consider the two bonds A and B
Bond A Maturity 3 years , coupon rate 12 %, Par value $2000
Bond B Maturity 4 years , coupon rate 8 %, Par value $2000
A) If both bonds had a required return of 10%, what would the bonds prices be?
B) Describe what it means if a bond sells at a discount, a premium, and at its par value. Are these two bonds selling at a discount, premium, or par?