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Tonya is trying to decide which of two bonds to buy. Bond CH is a 10 percent​ coupon, 10-year​ maturity, $1,000​ par, January​ 1, 2017 issue paying annual interest. Bond AW is a 10 percent​ coupon, 10-year​ maturity, $1,000​ par, January​ 1, 2017 issue paying​ semi-annual interest. The market required return for each bond is 10 percent. When determining the price of the​ bonds, Tonya will find that​ ________.

Respuesta :

Answer:

Prices of bonds are determined by the yield

Explanation:

When determining the price of the​ bonds, Tonya will find that​ prices of bonds are determined by the yield.

The most influential factors that affect a bond's price are yield, prevailing interest rates and the bond's rating.

Essentially, a bond's yield is the present value of its cash flows, which are equal to the principal amount plus all the remaining coupons.

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