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Which of the following statements is true if a​ bond's stated interest rate is higher than the market​ rate?

A. The bond will be issued at par.
B. The bond will be issued at a discount.
C. The bond will be issued at a premium.
D. The bond will be issued for an amount lower than the maturity value.

User Ganjim
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2 Answers

1 vote

Answer:

:3

Step-by-step explanation:

User Jared Grubb
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Answer: The bond will be issued at a premium

Step-by-step explanation: If the interest rate on bond is higher than the market interest rate then the investors of such bond will get a greater benefit. Hence to get the greater benefit an investor must pay a higher value, thus, the bond will be issued at premium.

Higher interest rate means the company will pay interest to investors mare than i the general rate in market, Therefore, company can charge investors more from a more valuable asset.

Hence from the above we can conclude that the correct option is c.

User LRA
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