When the market interest rate is equal to the coupon interest rate, bonds sell at their par value. When the market interest rate is below the coupon interest rate, bonds sell above their par value and they are called premium bonds. When the market interest rate exceeds the coupon interest rate, bonds sell below their par and are called discount bonds.

There is an inverse relationship between value of bonds and market interest rates. As market interest rates increase, the present value of future cash flows declines and the value of bond decreases. Conversely, if market interest rates decrease, the present value of future cash flows increases and the value of bond increases. It is important to note that market interest rates might change but there is no change in coupon interest rate.

As also understood from the information given, all of the statements in the options about interest rates and bond values are correct, so the correct answer is E.