A bond with an 9% coupon and a 10% required return will sell at a premium to par.

Name: A bond with an 9% coupon and a 10% required return will sell at a premium to par.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A bond sells at a premium when its coupon rate is higher than the required return. In this case, the coupon rate (9%) is less than the required return (10%), so the bond will sell at a discount, not a premium.

A Bond with an 9% Coupon and a 10% Required