Question: In response to a few questions regarding present value, future value, simple interest and compounding interest Grillo made the following points. Point 1 : A

In response to a few questions regarding present value, future value, simple interest and compounding interest Grillo made the following points.

Point 1: A premium bond has a coupon rate that exceeds the yield to maturity and the market price that exceeds the face value. When a bonds yield to maturity is greater than the bonds coupon, the bond is selling at a discount.

Point 2 : Municipal bonds generally have a lower coupon rate than comparable corporate bonds and are appealing to individuals with low marginal tax rates.

Are the statements identified as Point 1 and Point 2 correct?

A. No for Point 1, but yes for Point 2.

B. Yes for Point 1, but no for Point 2.

C. No for Point 1 and 2.

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