If a bond's face value plus all coupon payments exceeds the price a buyer pays, the bond pays:
A)a discount rate.
B)interest.
C)a premium.
D)the rate of inflation.

Question

Quizplus · Accepted Answer

The bond pays interest, which is the return the investor receives over the bond's life, including coupon payments. If the total of face value and coupon payments exceeds the purchase price, the bond is effectively providing a return above the initial investment, which is the interest.

If a Bond's Face Value Plus All Coupon Payments Exceeds