More than its par value
Seasoned par value
At par value
Below its par value
✅ The correct answer is A.
A bond’s interest rate is related to the current prevailing interest rates and the perceived risk of the issuer. When interest rates are less than the coupon rate, the bond can be sold at a premium (higher than the face value). When current interest rates are greater than a bond’s coupon rate, the bond will sell below its face value at a discount.
A bond’s interest rate is related to the current prevailing interest rates and the perceived risk of the issuer. When interest rates are less than the coupon rate, the bond can be sold at a premium (higher than the face value). When current interest rates are greater than a bond’s coupon rate, the bond will sell below its face value at a discount.