Is the interest yield on bond a greater than bond c

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Question - Bond A is a 12-year 7% annual coupon bond. Bond B is a 12-year 9% annual coupon bond. Bond C is a 12-year 11% annual coupon bond. Each of these three bonds has a yield to maturity (YTM) of 9%. Assume the market rate of interest does not change over time.

1. If the capital gains yield (CGY) earned on Bond A greater than the CGY on Bond C? Explain.

2. Is the interest yield (IY) on Bond A in year 2 greater than the IY on Bond C in year 2? Explain.

Reference no: EM133173513

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