Answer:
Option D is the correct answer.
Explanation:
The issue price of a bond is the price at which bonds are issued on the issue date. This price can be equal to the face value or par value of the bond if the market interest rate and bond's coupon rate are equal. It can be less than the par value or face value of bonds when the market interest rates are higher than bond's coupon rate and it can be higher than the par or face value of bond if the market interest rates are lower than the bond's coupon rate.
However, it s important to note that the price of bond or issue price of bond in each case is calculated based on the present value of expected future cash flow from the bond in the form of interest and principal. Thus, Option D is the correct answer.
