If the Market Interest Rate Is 4

question 42

Multiple Choice

If the market interest rate is 4.5%, a $100,000, 5.6%, 10-year bond that pays interest semi-annually would sell at an amount

• A)less than face value.
• B)equal to the face value.
• C)greater than face value.
• D)that cannot be determined.

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Definitions:

Auditory Stimuli

Sounds or noises that initiate a response or reaction in the listener.

Effortful Processing

A type of information processing in the brain that requires a conscious effort and attention, unlike automatic processes.

Automatic Processing

Cognitive operations that occur without conscious thought, often quickly and effortlessly, such as recognizing faces or understanding words.

Incidental Information

Information that is not essential or central but may be encountered or learned by chance.