If the market interest rate is 4.5%, a $100,000, 5.6%, 10-year bond that pays interest semi-annually would sell at an amount
A) less than face value.
B) equal to the face value.
C) greater than face value.
D) that cannot be determined.

Question

Quizplus · Accepted Answer

The bond's coupon rate (5.6%) is higher than the market interest rate (4.5%), so the bond would sell at a premium, meaning greater than face value.

If the Market Interest Rate Is 4