If a bond has a contract rate of 10% and is discounted at 10%, then the proceeds received at issuance will be
A) equal to the face value of the bonds.
B) greater than the face value of the bonds.
C) less than the face value of the bonds.
D) zero.

Question

Quizplus · Accepted Answer

When a bond's contract rate (coupon rate) is equal to the discount rate (market rate), the bond is issued at par, meaning the proceeds received at issuance will be equal to the face value of the bonds.

If a Bond Has a Contract Rate of 10% and Is