If the price paid for security is equal to the face value, then the security is told to be sold at par. However, the purchase price generally differs from face value. If the security is sold at a price below the face value, it is sold at a discount. On the other hand, if the price exceeds the face value, security is sold at a premium7 . What determines whether it will be sold at par, at discount or at premium is usually the difference between the interest rate offered by security and the rate of return available in the market. The correct answer is C.