A company has two issues of bonds outstanding – they both have the same maturities and coupon rates,…

A company has two issues of bonds outstanding – they both have the same maturities and coupon rates,….

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A company has two issues of bonds outstanding – they both have the same maturities and coupon rates, but differ in one respect. The first issue (Issue A) is callable, while the second is not. Respond true or false to the following statements.

a. The callable bonds will trade for a higher price than the non-callable bonds.

b. The callable bonds have a shorter duration than the non-callable bonds.

c. The callable bonds will have a higher yield than the non-callable bonds.

d. The callable bonds will be more sensitive to interest rate changes than the non callable bonds.

A company has two issues of bonds outstanding – they both have the same maturities and coupon rates,…

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