If the interest rate on bonds is lower than the current market rate, the bonds will sell at a premium.

Name: If the interest rate on bonds is lower than the current market rate, the bonds will sell at a premium.
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If the interest rate on bonds is lower than the current market rate, the bonds will sell at a discount, not a premium. Investors will demand a lower price for the bonds because the interest payments will not be as valuable compared to other options in the market.

If the Interest Rate on Bonds Is Lower Than the Current