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    Question

    A bond selling at a price above its face value is said

    to be selling at a:
    A Discount Correct Answer Incorrect Answer
    B Premium Correct Answer Incorrect Answer
    C Par Correct Answer Incorrect Answer
    D Coupon Correct Answer Incorrect Answer

    Solution

    When a bond's market price is higher than its face (par) value, it is trading at a premium. This typically happens when its coupon rate is higher than the prevailing market interest rates.

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