If the market rate of interest is lower than the contractual interest rate, the bonds will sell at
A)face value.
B)a premium.
C)a discount.
D)an unknown amount.

Question

Quizplus · Accepted Answer

When the market rate of interest is lower than the contractual interest rate, bonds will sell at a premium because they offer a higher return than the current market rate, making them more attractive to investors.

If the Market Rate of Interest Is Lower Than the Contractual