When a bond is sold at a$$ discount, the maturity value is less than the present value of the principal and interest$$ payments, based on the market rate of interest on the date of issue.

True or False?

Why?

A$.$

the maturity value is less than the present value of the principal and interest$$ payments, based on the contract$($stated$)$ rate.

B$.$

the maturity value is greater than the present value of future cash$$ flows, which is why the bond was issued at a discount.

C$.$

the market rate of interest is higher than the contract$($stated$)$ rate.

D$.$

the market rate of interest is lower than the contract$($stated$)$ rate.