What is the primary difference between discounted bonds and premium bonds?

• A. Discounted bonds are issued when the market interest rate is lower than the stated interest rate, while premium bonds are issued when the market interest rate is higher than the stated interest rate.
• B. Discounted bonds are issued at a price higher than their face value, while premium bonds are issued at a price lower than their face value.
• C. Discounted bonds have a stated interest rate lower than the market rate, while premium bonds have a stated interest rate higher than the market rate.
• D. Discounted bonds and premium bonds are issued at the same price but have different maturity dates.

Answer: (C)