If the required return is less than the coupon rate, a bond will sell at

Name: If the required return is less than the coupon rate, a bond will sell at
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the required return is less than the coupon rate, investors will perceive the bond to be more valuable than its par value and will be willing to pay more than par in order to secure the higher coupon payments. This results in the bond selling at a premium.

If the Required Return Is Less Than the Coupon Rate