If a bond has a market value that is higher than its par value,then the required return on the bond must be less than the bond's coupon rate.

Question

Quizplus · Accepted Answer

When a bond's market value exceeds its par value, it indicates that the bond is trading at a premium. This typically happens when the bond's coupon rate is higher than the current market interest rates, meaning the required return (yield to maturity) on the bond is less than the bond's coupon rate.

If a Bond Has a Market Value That Is Higher