If the market interest rate is 10%, a $10,000, 12%, 10-year bond that pays interest annually would sell at an amount
A) less than face value.
B) equal to face value.
C) greater than face value.
D) that cannot be determined.

Question

Quizplus · Accepted Answer

The bond's coupon rate (12%) is higher than the market interest rate (10%), so it would sell at a premium, meaning greater than face value.

If the Market Interest Rate Is 10%, a $10,000, 12