If the market interest rate is 10%, a $10,000, 12%, 10-year bond, that pays interest semiannually 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