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25 July, 16:39

Investors willing to pay the full face amount for bonds that pay a lower contract rate of interest than the rate they could earn on similar bonds (market rate).

True / False.

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  1. 25 July, 17:11
    0
    The correct answer is False.

    Explanation:

    The above statement is related to the bonds issued at a discount, where in the proposed scenario, the bonds will only be sold at a discount when the market interest rate is higher than that of the contract. When the opposite happens, the operation cannot be performed, since no benefits would be obtained.
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