Bonds with a 7% interest rate were issued when the market rate of interest was 6%. This bond was issued at:
A) par value.
B) a premium.
C) a discount.
D) face value.

Name: Bonds with a 7% interest rate were issued when the market rate of interest was 6%. This bond was issued at: A) par value. B) a premium. C) a discount. D) face value.
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Question

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Bonds with a higher interest rate than the market rate are issued at a premium because investors are willing to pay more to receive a higher return on their investment.

Bonds with a 7% Interest Rate Were Issued When the Market