Builtrite has two bond issues outstanding(sold two separate groups of bonds over the years). One issue has a 7 year maturity and the other issue had a 12 year maturity. Both bonds are paying 4.25% annual interest. Investors only require a 3.75% return, which of the following statements is true?
a) The 7 year bond issue is riskier than the 12 year bond issue
b) Both bond issues have the same amount of risk
c) The 7 year bond price will be selling closer to par value
d) The 12 year bond price will be selling closer to par value
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Builtrite has two bond issues outstanding(sold two separate groups of bonds over the years). One iss...
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