Question

If the market rate of interest is 7%, the issue price of 7% bonds paying interest semiannually with a face value of $200,000 will be Group of answer choices Greater than $200,000 Equal to $200,000 Greater than or less than $200,000, depending on the maturity date of the bonds Less than $200,000

Answer 1

Answer:

Equal to $200,000

Explanation:

Given that

The market rate of interest is 7%

And, the coupon rate of interest is also 7%

So when the market rate of interest is equivalent to the coupon rate of interest that means it is issued at par value neither discount nor premium.

So it is equal to $200,000

Hence, the above represent the answer