When bonds are sold for less than the face amount,this means that the
A)maturity value will be less than the face amount.
B)maturity value will be greater than the face amount.
C)bonds are sold at a premium.
D)face rate of interest is less than the market rate of interest.

Question

Quizplus · Accepted Answer

When bonds are sold for less than the face amount, it indicates that the interest rate offered by the bonds is lower than the prevailing market interest rates, leading investors to pay less for these bonds to achieve a yield that is competitive with current market rates.

When Bonds Are Sold for Less Than the Face Amount,this