Given the following information: XY Inc. 5% bond AB Inc. 14% bond Both bonds are for $1,000, mature in 20 years, and are rated AAA. i) Which bond would you expect to be called if interest rates are 10...

Given the following information:
XY Inc. 5% bond
AB Inc. 14% bond
Both bonds are for $1,000, mature in 20 years, and are rated AAA.


i) Which bond would you expect to be called if interest rates are 10 percent?

ii) If CD Inc. had a bond outstanding with a 5 percent coupon and a maturity date

of 20 years but it was rated BBB, what would you expect its price to be relative to

the XY Inc. bond?