T9 EIC 4 (Lecture)

In the latest debt auction for Australian Government Bonds, the following bids are tendered:

Bid 1: $20M at 4.35% YTM

Bid 2: $15M at 4.15% YTM

Bid 3: $30M at 4.5% YTM

Bid 4: $5M at 4.25% YTM

If the Australian Government wishes to raise $20M from this debt issuance, which bids will be selected?

(select all correct answers only, selecting the wrong answer will result in a mark penalty. selecting all answers will result in 0.)