A customer purchases a 4% corporate bond yielding 5%. A year before the bond matures, new corporate bonds are issued at 3%, and the customer sells the 4% bond. Which of the following statements regarding the bond are TRUE?
The customer bought it at a discount.
The customer bought it at a premium.
The customer sold it at a premium.
The customer sold it at a discount.
A) II and III.
B) II and IV.
C) I and III.
D) I and IV.
Answer: C) I and III.