Cassa & Associates purchased the bonds of JayBird. These bonds pay 5% interest semi-annually. The effective rate of interest at the date of investment was 4%. Did Jules purchase these bonds at a discount or premium?

A. These bonds were purchased at a premium because the stated rate exceeds the market rate.

B. These bonds were purchased at a discount because the stated rate exceeds the market rate.

C. These bonds were purchased at a premium because the market rate exceeds the stated rate.

D. These bonds were purchased at a discount because the market rate exceeds the stated rate.