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

\begin{tabular}{lcccc}
& Bond 1 & Bond 2 & Bond 3 & Bond 4 \\
\cline{2-5} Stated Rate of Return & 10\% & 8\% & 12\% & 12\% \\
Market Rate of Return & 12\% & 8\% & 15\% & 10\% \\
\end{tabular}

A. Bond 1
B. Bond 3
C. Bonds 2 and 4
D. Bonds 1 and 3

Sagot :

GinnyAnsweridn
To determine which bond(s) will be issued at a discount, we need to compare the stated rate of return for each bond to the corresponding market rate of return. A bond is issued at a discount if its stated rate of return is less than the market rate of return.

Let's analyze each bond step-by-step:

1. Bond 1:
- Stated Rate: 1096
- Market Rate: 1296
- Comparison: 1096 < 1296
- Conclusion: Bond 1 will be issued at a discount.

2. Bond 2:
- Stated Rate: 896
- Market Rate: 896
- Comparison: 896 = 896
- Conclusion: Bond 2 will not be issued at a discount (since the stated rate is equal to the market rate).

3. Bond 3:
- Stated Rate: 1296
- Market Rate: 1596
- Comparison: 1296 < 1596
- Conclusion: Bond 3 will be issued at a discount.

4. Bond 4:
- Stated Rate: 1296
- Market Rate: 1096
- Comparison: 1296 > 1096
- Conclusion: Bond 4 will not be issued at a discount (since the stated rate is higher than the market rate).

Based on these comparisons, we find that Bond 1 and Bond 3 are issued at a discount.

Answer:
Bonds 1 and 3
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