To determine whether a bond will sell at a price equal to, greater than, or less than face value, compare the stated and market interest rates.

Question

Quizplus · Accepted Answer

When the stated interest rate of a bond is higher than the market interest rate, the bond will sell at a price greater than its face value. When the stated interest rate is lower than the market rate, the bond will sell at a price lower than its face value. When the stated rate and market rate are the same, the bond will sell at its face value.

To Determine Whether a Bond Will Sell at a Price