If coupon rate is less than going rate of interest then bond will be sold
A. seasoned par value
B. more than its par value
C. at par value
D. None of the above
Answer: Option B
Solution (By Examveda Team)
If coupon rate is less than going rate of interest then bond will be sold more than its par value. Most bonds have fixed coupon rates, meaning that no matter what the national interest rate may be and regardless of marker fluctuation the annual coupon payments remain static.This Question Belongs to Commerce >> Financial Management
There is not right option. The correct answer is below par value.
This is wrong answer. When coupon rate is less than current/going rate, than bond will be sold at below par value.