If a bond's coupon rate is equal to the market rate of interest, then the bond will sell:
A) at a price equal to its face value.
B) at a price greater than its face value.
C) at a price less than its face value.
D) None of the above is true.

Question

Quizplus · Accepted Answer

When a bond's coupon rate is equal to the market rate of interest, it means that the bond is priced fairly and offers investors a yield equal to the prevailing market rate of interest. Therefore, the bond will sell at a price equal to its face value.

If a Bond's Coupon Rate Is Equal to the Market