A bond was issued at a par value of $1,000 when the interest rate for similar bonds was 8 percent.Presently,new bonds issued with a similar creditworthiness have a 10 percent interest rate.Which of the following is most likely to be true about the bond?
A) It is currently selling for a premium.
B) It is currently selling at a discount.
C) It is currently selling at par.
D) It is likely to be retired.
E) The bond's coupon rate increases.
Correct Answer:
Verified
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