Q602
If market interest rate rises above coupon rate then bond will be sold
A.
equal to return rate
B.
seasoned price
C.
below its par value
AnswerD.
above its par value
Answer: Option C
Solution
Answer: Option C
Solution:
If market interest rate rises above coupon rate then bond will be sold below its par value. Once a bond is issued the issuing corporation must pay to the bondholders the bond's stated interest for the life of the bond.