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| rev | Admin | (Created page with "'''Solution: D''' Throughout the solution, let <math>j=i/2</math>. For bond A, the coupon rate is <math>(i+0.04)/2=j+0.02.</math> For bond B, the coupon rate is <math>(i-0.04)/2=j-0.02. </math> The price of bond A is <math>P_{A}=10,000(j+0.02)a_{\overline{30}|j}+10,000(1+j)^{-20}. </math> The price of bond B is <math>P_{B}=10,000(j-0.02)a_{\overline{20}|i}+10,000(1+j)^{-20} </math> Thus, <math display = "block"> \begin{align*} P_{A}-P_{B}=5,341.12=[200-(-200)]a_{\...") | Nov 19'23 at 18:18 | +710 |