If the interest rate on a bond is 8% and the market interest rate is 7%, the bond will be issued at a price above the par value of the bond.

Question

Quizplus · Accepted Answer

If the interest rate on a bond is higher than the market interest rate, investors will be willing to pay more than the par value of the bond in order to receive that higher yield. This means that the bond will be issued at a premium, above its par value.

If the Interest Rate on a Bond Is 8% and the Market