The present value of a $10,000, 5-year bond, will be less than $10,000 if the:

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When the stated interest rate (also known as coupon rate) is less than the market interest rate, the bond will be offered at a discount, which means that its present value will be less than the face value of $10,000. This is because investors can get a higher return elsewhere in the market and are not willing to pay full price for a bond with a lower interest rate.

The Present Value of a $10,000, 5-Year Bond, Will Be