Suppose You Buy a Bond with a Face Value of $1,000

question 29

Multiple Choice

Suppose you buy a bond with a face value of $1,000 for $800. What is the interest rate you receive on the bond?

• A) 0.8%
• B) 1.25%
• C) 20%
• D) 25%

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Definitions:

Credit Side

The right side of an accounting ledger where increases in liabilities, equity, and revenue, or the decrease in assets, are recorded.

T Account

A visual representation of a ledger account that displays both the debit and credit sides to track the balance of financial transactions.

Chronological Order

Organizing events or actions by the order in which they occurred in time.

Error Location

The process or act of identifying the specific spot within a data set, document, or system where a mistake or discrepancy has occurred.