When a bond’s coupon rate is lower than the current market interest rate (Yield to Maturity), the bond sells at a:

Explanation

Core Concept: If coupon rate < YTM, investors require higher yield than the bond offers on face value, forcing the market price below par value (selling at a discount). Context/Distractors: If coupon rate > YTM, the bond sells at a premium. If coupon rate = YTM, it sells at par. Exam Tip/Key Fact: Bond prices move inversely to interest rates (YTM).