Assume that an outstanding seven-year bond has $1,000 par value, a coupon rate of 10 percent, and five years remaining to maturity. If the required rate of return on similar bonds of equal risk is 5 percent, the bond will sell at which of the following?

a. A premium

b. A discount

c. At par value

d. At $500 ($100 annual interest payments x 5 years to maturity)

e. The bond cannot be sold again because it is already outstanding.