The stated interest rate is always equal to the market interest rate on the date the bonds are issued.

Question

Quizplus · Accepted Answer

The stated interest rate may not necessarily be equal to the market interest rate at the time of issuance of bonds. The market interest rate may vary based on various factors such as economic conditions, inflation, and demand for the bonds, which may influence the yield required by investors. The stated interest rate is determined by the issuing company and is usually based on factors such as the company's creditworthiness, prevailing interest rates, and the desired return on investment for the bondholders.

The Stated Interest Rate Is Always Equal to the Market