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4. Your grandfather is giving you an option to choose between two premium bonds. Both have the same coupon rate and required rate of return.

4. Your grandfather is giving you an option to choose between two premium bonds. Both have the same coupon rate and required rate of return. However, one pays coupon annually and the other pays coupon semiannually. Which one would you choose?

5. Suppose you know only coupon rate and the required rate of return of a bond. Can you say whether it is issued at discount, premium, or per value? Explain.

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