Solstice Corporation issued a 3% bond four years ago at par value. The market interest rate on comparable bonds today is 4%
A) This bond sells at a discount and the coupon rate is higher than the yield.
B) This bond sells at a premium and the coupon rate is lower than the yield.
C) This bond sells at a discount and the coupon rate is lower than the yield.
D) This bond sells at a premium and the coupon rate is higher than the yield.
Answer: B
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