Bonds with an 8% interest rate were issued when the market rate of interest was 9%. The quoted bond price:
A)will be 100.
B)will be greater than 100.
C)will be less than 100.
D)cannot be determined.

Question

Quizplus · Accepted Answer

When the market rate of interest is higher than the bond's interest rate, the bond's price will decrease. Therefore, the quoted bond price will be less than 100.

Bonds with an 8% Interest Rate Were Issued When the Market