If a bond's stated interest rate is the same as the market rate,which of the following is TRUE?
A) The bond will be issued at a premium.
B) The bond will be issued at par.
C) The bond will be issued at a discount.
D) The bond will be issued for an amount lower than the maturity value.

Question

Quizplus · Accepted Answer

A bond that is issued at par means that the market rate and the stated interest rate are the same, resulting in the bond being issued at face value. Therefore, choice B is the correct answer. Choices A, C, and D are incorrect because they all suggest that the bond will not be issued at par, which is not true if the market rate and stated interest rate are the same.

If a Bond's Stated Interest Rate Is the Same as the Market