INSTRUMENT Treasury Bonds _________________________________________________________________________

CURRENCY Australian dollars _________________________________________________________________________

MATURITY DATE 21 October 2018 _________________________________________________________________________

COUPON 3.25% per annum, paid semi-annually in arrears, on the Face Value of the bonds _________________________________________________________________________

REDEMPTION: Par

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COUPON PAYMENT DATES 21 April and 21 October in each year commencing on 21 April 2014, to and including the Maturity Date _________________________________________________________________________

DENOMINATION $1,000 Face Value _________________________________________________________________________

Is this bond trading at par, at a premium or at a discount? What condition gives rise to this pricing relationship? Based on this pricing relationship, what can you infer about the risk of an investment in these bonds since they were first issued?