Q571
If coupon rate is less than going rate of interest then bond will be sold
A.
seasoned par value
B.
more than its par value
AnswerC.
at par value
D.
None of the above
Answer: Option B
Solution
Answer: Option B
Solution:
If coupon rate is less than going rate of interest then bond will be sold more than its par value. Most bonds have fixed coupon rates, meaning that no matter what the national interest rate may be and regardless of marker fluctuation the annual coupon payments remain static.