The Bonds are issued at stated rate of interest higher than the market rate of interest, then the investors will be ready to pay more price for the product as they will get higher returns than expected in the form of interest income during the lifetime of bonds. The conditions in which the issuer has to make the bonds issuance at a premium need to be determined.

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Chapter 14, Problem 7RQ

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The Bonds are issued at stated rate of interest higher than the market rate of interest, then the investors will be ready to pay more price for the product as they will get higher returns than expected in the form of interest income during the lifetime of bonds.

The conditions in which the issuer has to make the bonds issuance at a premium need to be determined.

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