need answer and explanation Each of the option-free bonds listed below has a par value of $1,000: Bond A: 10 years to maturity; discount rate 6.5%;
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need answer and explanationEach of the option-free bonds listed below has a par value of $1,000:

    Bond A: 10 years to maturity; discount rate 6.5%; annual coupon rate 5.0%;

    Bond B: 10 years to maturity; discount rate 6.5%; annual coupon rate 7.0%;

    Which of the following statements about the two bonds is most accurate? If the discount rate for each of the bonds remains at 6.5% for 10 years, the passage of time will result in a decrease in value for:

    A: Bond A only;

    B: Bond B only

    C: both of the bonds


    2.Bond A's features are described below:

    Annual coupon rate:5%

    coupon payment frequency: semiannual;

    Interest payment date: 10 April and 10 October;

    Maturity date: 10 October 2016;

    Day count convention: 30/360;

    yield to maturity: 4%.

    Bond A is sold of settlement on 16 June 2014. The full price that bonds A will settle at on 16 June 2014 is closest to:

    A: 102.36

    B: 103.10

    C: 103.65

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