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A bond market analyst forecasts that in six months the

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A 30 year maturity bond (Bond A) has a 7% coupon rate paid semiannually. It sells today for $867.42. A 20 year maturity bond (Bond B) has a 6.5% coupon rate, also paid semiannually. It sells today for $879.50. A bond market analyst forecasts that in six months, the first bond will sell at yield to maturity of 8% and that the second bondwill sell at yield of 7.5%. Which bond offers the higher expected return over the six month investment period?

Reference no: EM13576180

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