Answer:
The answer is:
discount; the buyer for the below market coupon rate
Explanation:
The bond discount is the difference by which a bond's market value is lower than its face value. That is, a bond is selling at discount if its coupon payment is less than the market yield(interest rate).
The coupon payment is $100 and the face value is $1,000. Therefore, coupon rate is 10% [(100/1000) x 100percent].
So coupon rate < market interest rate.
And it is paying at discount to compensate the buyer for the below coupon rate.
