Question

An investor purchases a company’s bond from two years ago with a lower coupon rate than this year’s bond. Why would the investor want to buy a lower-interest bond in the secondary market?

Answer 1

Answer:

opportunity to negotiate a lower par value to offset the lower interest rate.

Explanation:

correct on gradpoint

Answer 2

This investor would want to buy a lower interest bond in the secondary market because of the opportunity to negotiate a lower par value to offset the lower interest rate.
If there is a lower value, there is a lower interest rate, which is what this investor is interested in.