A bond sells at a discount when the market rate of interest is above the bond's fixed coupon rate.

Name: A bond sells at a discount when the market rate of interest is above the bond's fixed coupon rate.
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Question

Quizplus · Accepted Answer

When the market rate of interest is higher than the bond's coupon rate, investors demand a higher yield, causing the bond's price to fall below its face value, resulting in a discount.

A Bond Sells at a Discount When the Market Rate