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If the market rate us greater than the coupon rate, bonds will be sold at a...

If the market rate us greater than the coupon rate, bonds will be sold at a premium

true or false
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Answer #1

False.

A coupon rate is the rate at which the bond will give annual interest to the bondholders .

A bond whose market interest rate is higher than the coupon rate will be available at discount as the bond is providing less interest in the bond so less investors will be willing to buy it.

Inversely. when the market rate interest is lower than the coupon rate of the bond than more investors would like to buy it as they will get higher interests causing bond to be sold at premium.

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