What is the term for a bond sold at a price below its stated par or face value?
AZero-Coupon Bond
BDiscount Bond
CPar Bond
DPremium Bond
Explanation
* A Discount Bond trades below face value when market required interest rate exceeds coupon interest rate.
* Premium Bond trades above face value (market yield < coupon rate).
* Par Bond trades at face value (market yield = coupon rate).
Exam Relevance
- Topic: Corporate Finance
- Subtopic: Bond Pricing & Valuation
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