Bond X and Bond Y are both issued by the same company. Each of the bonds has a face value of $100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y pays 7% interest. The current market rate of interest is 7%. Which of the following is correct?
A) Both bonds will sell for the same amount.
B) Bond X will sell for more than Bond Y.
C) Bond Y will sell for more than Bond X.
D) Both bonds will sell at a premium.
Answer: B
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