If the Market Rate of Interest Is 6%,a $10,000,10-Year Bond

question 96

Multiple Choice

If the market rate of interest is 6%,a $10,000,10-year bond with a stated annual interest rate of 8% would be issued at an amount:

• A)less than face value.
• B)equal to the face value.
• C)greater than face value.
• D)equal to the face value minus a discount.

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Definitions:

Gasoline

A petroleum-derived liquid used primarily as fuel in internal combustion engines.

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Products or services that can serve as replacements for each other; when the price of one increases, the demand for the other increases.

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A water-based cleaning agent used for washing clothes, which is specially formulated to dissolve, suspend dirt and soils, and rinse them away, leaving the fabric clean.

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