Which type of bond has a coupon rate that is equal to the market yield?

The answer is D - Par Bond.

A is incorrect for obvious reasons; B would mean that the market rate was higher than the coupon rate (you have to sell at a discount to get others to buy your bonds); C has no coupon rate; and E would mean that the market rate was lower than the coupon rate (you can to sell at a premium since your rate is better than market).

I hope this helps.

i'm undecided what your question is. yet for a elementary bond the coupon cost is a fastened dollar quantity. The coupon fee is in accordance with a proportion of the par value of the bond, it fairly is variety of a $1000. A 7 % coupon bond could pay $70 in activity each and each 3 hundred and sixty 5 days each 3 hundred and sixty 5 days until adulthood. The marketplace makes a decision how plenty the corporate gets for the bond, in accordance with credit high quality, and the fees on different present bonds contained available. The bond could sell for greater or below par. whilst a company sells bonds they get the proceeds and that is going on the steadiness sheet, til they spend it.. Then they pay activity on them until adulthood. And at adulthood they pay the bond holder the face value of the bond, the par value. because of fact the bond trades contained available the cost ameliorations and subsequently so does the yield. The dollar quantity of the activity cost keeps to be the comparable. whilst somebody buys a bond they oftentimes seem on the yield to adulthood. Thats how plenty they gets in the event that they carry the bond until adulthood. and that they study yield to adulthood on that bond to the YTM of alternative bonds of the comparable credit high quality. And study the distinction between the yield of the bond and the yields of bonds of diverse credit high quality, like treasuries that have the acceptable credit high quality.