Interest premium.The U.S. government offers twobonds: one selling to yield6.5% and the other to yield8.5%. Why would one bond sell for a lower yield if the originator is the same on bothbonds?

(Select the bestresponse.)

A.

The difference between the yields of the U.S. government bonds is due to the maturity premium of the investments.

B.

The difference between the yields of the U.S. government bonds is due to the default premium of the investments.

C.

The difference between the yields of the U.S. government bonds is due to the liquidity premium of the investments.

D.

The difference between the yields of the U.S. government bonds is due to the forward premium of the investments.