Which statement regarding interest rate risk is true?
A) If the market interest rate for a bond is less than the bond's coupon rate, the bond will sell at a premium.
B) If the market interest rate for a bond is greater than the bond's coupon rate, the bond will sell at a premium.
C) If the market interest rate for a bond is less than the bond's coupon rate, the bond will sell at a discount.
D) If the market interest rate for a bond is greater than the bond's coupon rate, the bond will sell at a discount.
Correct Answer:
Verified
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