If the Market Rate of Interest Is 7%, the Price

Multiple Choice

If the market rate of interest is 7%, the price of 6% bonds paying interest semiannually with a face value of $500,000 will be

A) equal to $500,000
B) greater than $500,000
C) less than $500,000
D) greater than or less than $500,000, depending on the maturity date of the bonds