When the coupon rate equals the historical market interest rate or initial yield to maturity, then the initial issue price equals the face value of the bonds.

Question

Quizplus · Accepted Answer

When the coupon rate equals the market interest rate or yield to maturity, it means the bond is priced at par, which is equal to its face value. So, the initial issue price will be equal to the face value of the bonds. Therefore, the statement is true.

When the Coupon Rate Equals the Historical Market Interest Rate