Selling the Bonds at a Premium Has the Effect of

question 219

Multiple Choice

Selling the bonds at a premium has the effect of

• A) causing the total cost of borrowing to be higher than the bond interest paid.
• B) causing the total cost of borrowing to be lower than the bond interest paid.
• C) raising the effective interest rate above the state interest rate.
• D) increasing the amount of cash paid for interest each 6 months.

---

Definitions:

Interval Scale

The scale of measurement for a variable if the data demonstrate the properties of ordinal data and the interval between values is expressed in terms of a fixed unit of measure. Interval data are always numeric.

Ratio Scale

The scale of measurement for a variable if the data demonstrate all the properties of interval data and the ratio of two values is meaningful. Ratio data are always numeric.

Nominal Scale

The scale of measurement for a variable when the data are labels or names used to identify an attribute of an element. Nominal data may be nonnumeric or numeric.

Ordinal Scale

A ranking scale used to measure variable where the order of values is significant, but the difference between values is not uniform.