Two bonds have par values of $1,000. One is a 4%, 15-year bond priced to yield 10.0%. The other is a(n) 7%, 24-year bond priced to yield 4.5%. Which of these two has the lower price? (Assume annual compounding in both cases.)
The price, PV, of the 4%, 15-year bond is $3. (Round to the nearest cent.)
The price, PV, of the 7%, 24-year bond is $. (Round to the nearest cont.)
Which of these two has the lower price? (Select the best answer below.)
O The 7%, 24-year bond has lower price of $543.64.
O The 4%, 15-year bond has lower price of $543.64.