### Question 7**If the current interest rate is higher than the coupon rate on the bond: The sale price will be less than face value.****Select one:**- True- False---This question explores the relationship between current market interest rates and bond prices. When the present interest rate exceeds the coupon rate (the fixed interest paid by the bond), the bond will typically trade at a discount, meaning its sale price will be less than its face value. This phenomenon occurs because potential investors seek higher yields available in the market, thus devaluing the bond with a lower coupon rate.

While the current interest rate is higher than the coupon price on a bond, it means that the…

Answered: If the current interest rate is higher…

If the current interest rate is higher than the coupon rate on the bond: The sale price will be less than face value Select one: True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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