Consider Each of the Following Bonds: Bond A $\quad 8$ -Year Maturity with A

Multiple Choice

Consider each of the following bonds: Bond A: $\quad 8$ -year maturity with a $7 \%$ annual coupon.
Bond B: $\quad 10$ -year maturity with a $9 \%$ annual coupon.
Bond C: $\quad 12$ -year maturity with a zero coupon. Each bond has a face value of $1,000 and a yield to maturity of 8%. Which of the following statements is NOT correct?

A) Bond A sells at a discount, while Bond B sells at a premium.
B) If the yield to maturity on each bond falls to 7%, Bond C will have the largest percentage increase in its price.
C) Bond C has the most reinvestment risk.
D) Bond C has the most price risk.
E) If the yield to maturity is constant, the price of Bond A will continue to increase over its life until it finally sells at par.