If Bonds Are Issued at a Discount, It Means That

question 110

Multiple Choice

If bonds are issued at a discount, it means that the

• A) bondholder will receive effectively less interest than the contractual rate of interest
• B) market interest rate is lower than the contractual interest rate
• C) market interest rate is higher than the contractual interest rate
• D) financial strength of the issuer is suspect

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Definitions:

Mainstream Media

Widely disseminated media outlets, including television, radio, newspapers, and magazines, that reach a large audience.

Assumptions

Beliefs or ideas taken for granted without verification, often serving as a foundation for decision-making and behavior.

Stereotypes

Oversimplified generalized beliefs or assumptions about a group of people, ignoring individual differences.

Perceived Risks

The personal assessment or belief about the level of risk associated with an action or decision, regardless of actual risk.