Two investors are each issued one bond with the same face value, maturity date, and yield. After both bonds have reached maturity, it is discovered that one of the bondholders received a greater total return on her investment. If all expected payments were received, which of the following could explain the difference in return?(1 point)

To understand why one bondholder could have received a greater total return on her investment compared to the other, we can evaluate the options given.

1. One of the bonds earned greater interest payments than the other.
   This option is unlikely since both bonds are stated to have the same yield, which implies that they have the same interest payments. Thus, this option cannot explain the difference in total return.

2. One of the bonds was a corporate bond while the other was a savings bond.
   This option alone does not explain a difference in total return if both bonds were compared under the same yield and maturity conditions. While corporate bonds typically offer a higher yield than savings bonds, the problem states that both bonds have the same yield.

3. One of the bonds was sold at face value while the other was sold below face value.
   This option could explain the difference in total return. If one bond was purchased at a discount (below face value), the bondholder would receive both the interest payments and a capital gain when the bond matures at its face value. This could result in a greater total return compared to a bond purchased at face value.

4. One of the bonds was a municipal bond while the other was a savings bond.
   Similar to the previous analysis, this could involve different taxation but does not necessarily lead to higher total returns given the premise of equal yields and expected payments.

Given these points, the most plausible explanation for the difference in total returns is:

One of the bonds was sold at face value while the other was sold below face value.