Solve the question based on bonds

Reference no: EM1314472

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)

Reference no: EM1314472

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