If a bond has a coupon greater than the current market yield,it should be selling at a premium.

Question

Quizplus · Accepted Answer

If the coupon rate of a bond is greater than the current market yield, it indicates that the bond is paying a higher interest rate than what is prevailing in the market. Therefore, investors would be willing to pay a premium to buy the bond, which would bring down its yield to match the prevailing market rates. As a result, the bond's price would be higher than its face value, and it would be selling at a premium.

If a Bond Has a Coupon Greater Than the Current