If a bond's price is above its par value, its coupon rate will be

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When a bond's price is above its par value, it is considered to be selling at a premium. This typically happens when the bond's coupon rate (the interest rate it pays) is higher than the current market interest rates, or its yield-to-maturity. The yield-to-maturity is the total return anticipated on a bond if the bond is held until it matures, taking into account both the interest payments received and any gain or loss if the bond is purchased at a price different from its par value. Therefore, if the bond is selling at a premium, its coupon rate must be greater than its yield-to-maturity because investors are willing to pay more for the bond to receive its higher interest payments.

If a Bond's Price Is Above Its Par Value, Its