If the market interest rate at the date of issuance of a bond exceeds the face interest rate,the bond will probably be sold at a discount.

Question

Quizplus · Accepted Answer

If the market interest rate at the time of issuance exceeds the face interest rate, the present value of the bond's future cash flows will be lower, and therefore, the bond will likely be sold at a discount to compensate investors for the lower return they will receive compared to current market conditions.

If the Market Interest Rate at the Date of Issuance