Are bonds sold at a face value when the contract is equal to the market rate of interest?

Yes, bonds are typically sold at face value (also known as par value) when the contract interest rate, or coupon rate, is equal to the market rate of interest. In this scenario, investors find the bond's return consistent with current market conditions, leading to no premium or discount on its price. If the coupon rate deviates from the market rate, the bond may then be sold at a premium or a discount.