A bond will sell at its par value when the market rate of interest equals the stated rate of interest.

Question

Quizplus · Accepted Answer

This is because the stated rate of interest is the rate at which the bond was issued and is fixed, while the market rate of interest is constantly changing. If the market rate of interest is equal to the stated rate of interest, then investors will not receive a higher or lower return than what was expected when they purchased the bond, making it sell at par value.

A Bond Will Sell at Its Par Value When the Market