If the market rate of interest is 8%, the price of 6% bonds paying interest semi
ID: 2381440 • Letter: I
Question
If the market rate of interest is 8%, the price of 6% bonds paying interest semiannually with a face value of $250,000 will be. TY a. Less than $250,000. b. Greater than or less than $250,000, depending on the maturity date of the bonds. c. Equal to $250,000. d. Greater than $250,000. If the market rate of interest is 8%, the price of 6% bonds paying interest semiannually with a face value of $250,000 will be. TY a. Less than $250,000. b. Greater than or less than $250,000, depending on the maturity date of the bonds. c. Equal to $250,000. d. Greater than $250,000.Explanation / Answer
The coupon rate is 6% while the market yield is 8%
As the yield is greater than the coupon rate, the price will be lower than the face value of $250,000
So the answer is: Less than $250,000
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