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5 March, 15:10

If the market rate of interest is greater than the contractual rate of interest, bonds will sell:

a. at a premium.

b. at face value.

c. at a discount.

d. only after the stated rate of interest is increased.

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Answers (1)
  1. 5 March, 15:27
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    c. at a discount.

    Explanation:

    If the market interest rate is greater than the contractual rate of interest, the bond will sell at a discount. It means that the bond is selling at a rate less than its par value.

    If the market interest rate is less than the contractual rate of interest, the bond will sell at a premium. It means that the bond is selling at a rate higher than its par value.

    If the market interest rate is equal to the contractual rate of interest, the bond will sell at par or at face value.
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Home » Business » If the market rate of interest is greater than the contractual rate of interest, bonds will sell: a. at a premium. b. at face value. c. at a discount. d. only after the stated rate of interest is increased.
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