If the market interest rate at the date of issuance of a bond exceeds the face interest rate,the present value of the face value plus the present value of all the future interest payments will equal an amount greater than the face value of the bond.

Question

Quizplus · Accepted Answer

When the market interest rate exceeds the face interest rate, the bond is issued at a discount, meaning its present value is less than the face value.

If the Market Interest Rate at the Date of Issuance