Suppose That a Bond Is Issued at Its Par Value

question 47

Multiple Choice

Suppose that a bond is issued at its par value or face value.If market interest rates rise after the issue, the price of the bond will likely:

• A)rise significantly above its par value.
• B)rise slightly above its par value.
• C)remain equal to its par value.
• D)fall below its par value.
• E)rise or fall, depending on the bond's maturity.

---

Definitions:

Distractors

Stimuli that divert attention away from the primary task or target, often leading to decreased performance.

Conjunction Searches

A visual search task where subjects search for an object that is defined by a combination of two or more features, such as color and shape, among distractors.

Cognitive Process

Mental activities involved in acquiring, storing, retrieving, and using information, including thinking, reasoning, and problem-solving.

Practice

Repeated exercise in or performance of an activity or skill so as to acquire or maintain proficiency in it.