The bond should be selling at a premium, if 4% is the prevailing interest rate at that time for bonds of that type, selling at par. The value of the bond will also depend upon its term (how many years before it is redeemed), which should have been specified.
I do not see why they specify what your "required rate" is. The Yield to Maturity is what matters. That isdetermined by bond quality and market conditions.
How much would you pay for the bond ($1,000 par, 6% coupon rate) if your required rate is 4%? Is this bond selling for a premium or discount?
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If you pay $1500 for a $1000 face value bond paying 6% coupon, you will get $60 a year interest, and that will be 4% of what you paid. HOWEVER, when the bond matures, you will be paid only $1000, and you will have suffered a $500 loss on the principal. If it was a ten year bond, you will effectively have lost another $50 a year, or about 3% annually.
That is why the maturity period of a bond sold at premium is important in determining its price.
That is why the maturity period of a bond sold at premium is important in determining its price.
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