Amortized Premium Is Computed Annually When a Bond Is Issued

question 138

Multiple Choice

Amortized premium is computed annually when a bond is issued for other than its face value. For a bond issued at a premium, how will this component change as the bond approaches maturity?

• A) Decrease
• B) Increase
• C) Remain constant
• D) Not enough information given to decide.

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Definitions:

Carl Rogers

An influential psychologist who developed client-centered therapy, emphasizing unconditional positive regard, empathy, and the importance of the client in the healing process.

Ego

In psychoanalytic theory, the part of the personality that mediates between the demands of the id, superego, and reality.

Id

In psychoanalytic theory, the part of the mind in which innate instinctive impulses and primary processes are manifest.

Superego

The third psychic structure, which functions as a moral guardian and sets forth high standards for behavior.