A bond will sell at par when:

Question

Quizplus · Accepted Answer

When the coupon rate is equal to the effective rate (also known as the market rate or yield to maturity), the bond will sell at par or its face value because it provides a fair return to investors. If the coupon rate is greater than the effective rate, investors will be willing to pay more than par for the bond because they are receiving a higher return than the market rate. If the coupon rate is less than the effective rate, the bond will sell below par because investors demand a higher return than what the bond is offering.

A Bond Will Sell at Par When