Asked by
Tracy Feskatoa
on Nov 13, 2024
Verified
When the market rate of interest on bonds is higher than the contract rate, the bonds will sell at
A) a premium
B) their face value
C) their maturity value
D) a discount
Contract Rate
The agreed-upon rate for interest or currency exchange in a financial contract between parties.
Market Rate
The prevailing interest rate available in the marketplace for loans or deposits of a specific maturity.
- Understand the effect of bond market rates on the pricing of bond issuances.
Verified Answer
DG
Learning Objectives
- Understand the effect of bond market rates on the pricing of bond issuances.