When the market interest rate exceeds the coupon rate; the market price of the bond
A)will be more than par.
B)will be less than par.
C)will be equal to par.
D)is not affected.
E)none of the above

Question

Quizplus · Accepted Answer

When the market interest rate exceeds the coupon rate, the bond becomes less attractive to investors because they can earn a higher rate of return elsewhere. As a result, the market price of the bond will decrease and be less than par.

When the Market Interest Rate Exceeds the Coupon Rate; the Market