Bonds selling at a premium price offer a higher current yield than bonds selling at par value.

Name: Bonds selling at a premium price offer a higher current yield than bonds selling at par value.
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Question

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When a bond is selling at a premium, its coupon rate is higher than the current market interest rate. This means that the bond's annual interest payments provide a higher yield than bonds selling at par value, where the coupon rate matches the market interest rate.

Bonds Selling at a Premium Price Offer a Higher Current