Bond A and Bond B both have a maturity value of $1,000 and pay annual interest of 9%.The market rate of interest is also 9%.Bond A matures in 4 years and Bond B matures in 5 years.Which of the following is correct?
A)Bond A will sell for more than Bond B.
B)Both bonds sell for the same amount, $1,000.
C)Both bonds sell for more than $1,000.
D)Bond B will sell for more than Bond A.
E)There is not sufficient information to answer the question.

Question

Quizplus · Accepted Answer

Since both bonds have a coupon rate equal to the market interest rate, they will both sell at their face value, which is $1,000, regardless of their maturity dates.

Bond a and Bond B Both Have a Maturity Value