When a Bond Investment That Is Held to Earn Interest

question 128

True/False

When a bond investment that is held to earn interest is sold, a gain will be recorded when the amortized cost of the bond is less than the cash received.

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Definitions:

Social Optimum

The most efficient allocation of resources that maximizes the overall benefit to society.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to sell.

Market

A place or virtual space where buyers and sellers come together to trade goods, services, or financial instruments, determining the prices through supply and demand.

External Cost

Costs of a transaction that affect people who are not part of the transaction.