The market price of outstanding bond issues often varies from par because: A. old bonds sell...
The market price of outstanding bond issues often varies from par because: A. old bonds sell for less than new bonds. B. new bonds sell for less than old bonds. C. the coupon rate has changed. D. the maturity date has changed. E. the market rate of interest has changed.
Homework Answers
Answer. E. The market rate of interest has changed.
Because The market price of a bond is determined using the current interest rate compared to the interest rate stated on the bond. If the current market rate of interest has changed then market price will be changed.
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