Consider the Following Two Bonds That Pay Interest Annually At a Market Discount Rate of 4%, the Price Difference

Multiple Choice

Consider the following two bonds that pay interest annually: $\begin{array} { l c c } \hline \text { Bond } & \text { Coupon Rate } & \text { Time-to-Maturity } \\\hline \text { A } & 5 \% & 2 \text { years } \\\text { B } & 3 \% & 2 \text { years } \\\hline\end{array}$ At a market discount rate of 4%, the price difference between bond A and bond b per 100 of par value is closest to:

A) 3.70.
B) 3.77.
C) 4.00.