Forever, Inc. announces an offer to issue bonds with a $100,000 par value, an 8% annual contract rate (paid semiannually), and a two-year life. The market rate is 10%, so the bonds will be sold at a discount. Hence, Option B is correct.
A bond can be denoted as a kind of loan which is taken by the investor. After issuing the bond, it becomes easy for the governments and corporations to raise funds for the expansion of the business.
Here the investors receive the interest for investing the fund in bonds. In the case of Forever, Inc. as per the market rate of the bond, they will be sold at discount.
Thus, Option B is correct.
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