Bonds have the same amount of risk

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Three $1000 face value, 10-year, non-callable, bonds have the same amount of risk, hence their YTMs are equal. Bond 7 has a 7% annual coupon, bond 10 has a 10% annual coupon, and bond 11 has an 11% annual coupon. Bond 10 sells at par. Assuming that interest rates remain constant for the next 10 years, what can you say about the relative prices of bond 7 and bond 11? That is, indicate whether each bond should sell at par, discount or premium. Please show work.

Reference no: EM131188052

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