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Suppose there are two bonds: Bond A and Bond B that are being traded in the secondary market. Both have the same face value of $10,000, the same annual coupon rate of 6%, and the same maturity date. However, Bond A is a municipal bond and Bond B is a investment grade corporate bond. Which bond will have lower yield to maturity (YTM) and why? Draw graphs and explain.

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Financial Management, Finance

Category:- Financial Management
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