When the required return is greater than the coupon interest rate, the bond value will be less thanits par value.

Name: When the required return is greater than the coupon interest rate, the bond value will be less thanits par value.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the required return is greater than the coupon interest rate, it indicates that investors expect to receive a higher rate of return on their investment. In this scenario, the bond becomes less desirable and its value drops below its par value.

When the Required Return Is Greater Than the Coupon Interest