If the market interest rate at the date of issuance of a bond exceeds the face interest rate,the bond will probably be sold at a premium.

Question

Quizplus · Accepted Answer

If the market interest rate exceeds the face interest rate, the bond will likely be sold at a discount, not a premium. Investors will be willing to pay less for the bond because they could get a higher return by investing their money elsewhere at the current market interest rate.

If the Market Interest Rate at the Date of Issuance