Question

Market interest rate is 9%. A bond with 10% coupon will sell ____ par value?


• Above
• Below
• at
• None of the above

Answer 1

Answer:

below hope you like the answer

Answer 2

The answer to this question will be option A, 'Above'. Thus the complete sentence will be "Market interest rate is 9%. A bond with a 10% coupon will sell above par value."

• A bond is a fixed-income investment that represents a loan made by an investor to a borrower, usually corporate or governmental.
• It is usually used by large credit-worthy companies or governments. Basically, institutions that are considered trustworthy by the lenders.
• An example of a bond may be war bonds issued by governments to finance wartime costs,
• Bonds usually contain a fixed or variable interest rate often called the coupon rate.
• When the market interest rate falls below the coupon rate then the bond will be sold above its par value.
• Hence, the answer to this question will be option A, 'Above'. Thus the complete sentence will be "Market interest rate is 9%. A bond with a 10% coupon will sell above par value."

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