Bonds with a face value of $100, 000 that are issued for $102, 400 have a stated interest rate
A)that is more than the yield rate
B)that is less than the yield rate
C)that is equal to the yield rate
D)that may be more or less than the yield rate, but there is not enough information given to determine which

Question

Quizplus · Accepted Answer

When bonds are issued at a premium (more than their face value), it indicates that the stated interest rate is higher than the yield rate, as investors are willing to pay more for the higher interest payments.

Bonds with a Face Value of $100, 000 That Are