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When will a bond sell in the secondary market for its face value? When will a...

When will a bond sell in the secondary market for its face value?

When will a bond sell in the secondary market for less than it’s face value? For more than its face value?

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Answer #1

When the coupon rate and yield rate are equal then bond will be sell for its face value in the secondary market. It is know as that bond is selling at par.

When Coupon rate is less than yield rate then bond will be sell for less than it's face value in the secondary rate and we called this as bond is selling at discount.

When Coupon rate is more than yield rate then bond will be sell for more than it's face value in the secondary rate and we called this as bond is selling at premium.

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