A bond sells at the face value when the face interest rate of the bond is identical to the market interest rate for similar bonds on the date of the issue.

Question

Quizplus · Accepted Answer

This statement is true. When the face interest rate of a bond is at par with the market interest rate for similar bonds, the bond will sell at its face value. However, if the face interest rate is higher than the market interest rate, the bond will sell at a premium, and if it's lower, the bond will sell at a discount.

A Bond Sells at the Face Value When the Face