Which of the following statements is TRUE about a bond that is issued at a discount?
A) It will be sold at par.
B) Its interest rate is higher than the prevailing market rate.
C) It will repay principal at less than the face value.
D) It will be sold for less than the face value.

Question

Quizplus · Accepted Answer

A bond issued at a discount means that it is sold for less than the face value. This is because its interest rate is lower than the prevailing market rate. The bond will still repay principal at the face value at maturity.

Which of the Following Statements Is TRUE About a Bond