Respuesta :
Answer:
A. the coupon rate is less than the market interest rate.
Explanation:
- Bonds that offer a lower coupon rate generally tend to have a higher interest rate risks than those which are similar to the bonds that offer a higher coupon rate.
- If the market interest rates rise, then the price of the bonds with the 2% interest coupon rate and will fall more than the bond with a rate of 4%. As the face amount is the money that is held in bonds for example as the bond certificate.
