Question: Given the information below, which bond(s) will be issued at a premium? Bond 1 Bond 2 Bond 3 Bond 4 State Rate of Return 6.7%

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

Bond 1 Bond 2 Bond 3 Bond 4
State Rate of Return 6.7% 12.2% 9.3% 12.2%
Market Rate of Return 9.0% 9.5% 9.3% 10.0%
a. Bond 3
b. Bond 1
c. Bond 2
d. Bond 2 and 4

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