If the market rate of interest at the date of issuance of a bond is greater than the stated interest rate, the bond will be issued at a premium.

Question

Quizplus · Accepted Answer

When the market rate of interest is greater than the stated interest rate, the bond will be issued at a discount, not a premium, because investors will pay less for a bond that offers a lower return than the current market rate.

If the Market Rate of Interest at the Date of Issuance