Given the information below, which bond(s) will be issued at a discount?

Given the information below, which bond(s) will be issued at a discount?


Bond 1 Bond 2 Bond 3 Bond 4

Stated Rate of Return 10 % 8 % 12 % 12 %

Market Rate of Return 12 % 8 % 15 % 10 %



A) Bond 1.

B) Bond 3.

C) Bonds 2 and 4.

D) Bonds 1 and 3.



Answer: D


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