If a bond is issued at a premium, it will sell for more than face value.

Question

Quizplus · Accepted Answer

When a bond is issued at a premium, it means that the bond is sold for more than its face value or the amount it will be redeemed for at maturity. This occurs when the interest rate on the bond is lower than the prevailing market interest rate, making the bond more attractive to investors. As a result, the bond will sell for more than its face value to compensate investors for the lower interest rate.

If a Bond Is Issued at a Premium, It Will