Five years ago Two Towers Inc. issued bonds that pay a 7 percent coupon. At issue these bonds were rated BBB, but today they are rated AAA. Which of the following is most likely based on this information?
The bonds have more interest rate risk than when they were issued.
The bonds have more liquidity risk than when issued.
The bonds carry a larger default premium than when issued.
The bonds carry a smaller default premium than when issued.
The bonds now trade at a premium to par.