When researching which corporate bonds to invest, you noted that some bonds were trading at a premium (e.g. 4.7% coupon bonds issued by BSD Ltd was trading at 5% above its par value), whereas some were trading at a discount (e.g. 5.25% coupon bonds issued by API Ltd was trading 2% below its par value).

1. Hypothesise four (4) reasons for your observations.

(Approx 600 words)

(About 150 words per hypothesise.)