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If coupon rate is less than going rate of interest then...

This question belongs to Commerce Financial Management
Financial Management
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If coupon rate is less than going rate of interest then bond will be sold

Answer & Solution
Correct Answer: Option B
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.
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2 Comments
MN 697
MN 697 4 years ago
There is not right option. The correct answer is below par value.
MN 697
MN 697 4 years ago
This is wrong answer. When coupon rate is less than current/going rate, than bond will be sold at below par value.
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