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Corporate Bond A returns 5 percent of its cost in PV terms in each of the first five years and 75 percent of its

value in the sixth year. Corporate Bond B returns 8 percent of its cost in PV terms in each of the first five years and 60 percent of its cost in the sixth year. If A and B have the same required return, which of the following is/are true?

 

I. Bond A has a bigger coupon than Bond B.

II. Bond A has a longer duration than Bond B.

III. Bond A is less price-volatile than Bond B.

IV. Bond B has a higher PV than Bond A.

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