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  3. assume the following two aaa-rated corporate bonds

Assume the following two AAA-rated corporate bonds are traded in the market place: 1. 1-year...

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Assume the following two AAA-rated corporate bonds are traded in the market place: 1. 1-year maturity, 5% coupon selling at par. 2. 2-year maturity, 10% coupon selling at par. If all market prices are assumed to be fair, what coupon rate should the treasurer of a AAA-rated corporation use in issuing a new par bond to the market, if its maturity will be two years

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