Question

If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at a:_____

a. discount.
b. par.
c. either a discount
d. premium.

Answer 1

a. discount.

Step-by-step explanation:

When market interest is higher than stated interest rate means the bond is selling cheap which means something which is fetching a better rate in the market is being offered to us at a lower return which would require it to sell at discount to attract investors.