When a bonds stated interest rate is less than the market interest rate is it at a discount or premium?

1 answer

Answer

1086522

2026-03-28 10:15

+ Follow

When a bond's stated interest rate is less than the market interest rate, it is sold at a discount. This is because investors are less willing to pay the full face value for a bond that offers lower returns compared to prevailing rates. As a result, the bond's price falls below its par value to make it more attractive to potential buyers.

ReportLike(0ShareFavorite

Copyright © 2026 eLLeNow.com All Rights Reserved.