Given the information below, which bond(s) will be issued at a premium?
Bond 1 Bond 2 Bond 3 Bond 4
Stated Rate of Return 5 % 10 % 7 % 10 %
Market Rate of Return 7 % 8 % 7 % 9 %
A) Bond 1.
B) Bond 2.
C) Bond 3.
D) Bonds 2 and 4.
Answer: D
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