If the market rate of interest is greater than the contractual rate the bond will sell at a discount.

Name: If the market rate of interest is greater than the contractual rate the bond will sell at a discount.
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Question

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When the market interest rate exceeds the bond's contractual rate, the bond's fixed interest payments become less attractive, causing it to sell for less than its face value, or at a discount.

If the Market Rate of Interest Is Greater Than the Contractual