When the Contract Rate of Interest on Bonds Is Less

question 110

Multiple Choice

When the contract rate of interest on bonds is less than the market rate of interest, the bonds sell at:

• A) a premium.
• B) their face value.
• C) their maturity value.
• D) a discount.

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Definitions:

Good Faith

A principle requiring parties to act honestly and not mislead or withhold critical information in transactions.

UCC Mandated Duty

Required responsibilities established under the Uniform Commercial Code, applicable to transactions involving personal property.

Honest in Fact

Honest in fact refers to a principle in commercial law that describes being genuinely truthful and fair in one's dealings, without deception.

Perfect Tender Rule

A legal principle that demands a seller to deliver goods in accordance with the terms exactly as specified in a contract.