In the long run, the average return of treasury bonds is smaller than the average return of New York State bonds, because

		investors require a greater return of New York State bonds to compensate for the higher risk of New York State bonds
		investors require a greater return of New York State bonds to compensate for the lower risk of New York State bonds
		investors require a greater return of New York State bonds to compensate for the higher liquidity of New York State bonds
		None of the above