A $1,000 Face Value Bond Can Be Redeemed Early at the Issuer's

question 100

Multiple Choice

A $1,000 face value bond can be redeemed early at the issuer's discretion for $1,030, plus any accrued interest. The additional $30 is called the:

• A) dirty price.
• B) redemption value.
• C) call premium.
• D) original-issue discount.
• E) redemption discount.

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Definitions:

Cobb-Douglas

A type of production function used in economics to represent the relationship of an output to inputs, specifically capital and labor, with constants denoting the output elasticity of each input.

Perfect Substitutes

Two or more goods that can be used in place of one another with no loss of utility for the consumer, resulting in constant marginal rates of substitution.

Perfect Substitutes

Goods or services that can be used in exactly the same way and are interchangeable by consumers.

Coupons

Vouchers or codes offering a discount on the purchase price of goods or services.