A Bond's Value Is the Same as Its Principal Amount

question 74

Multiple Choice

A bond's value is the same as its principal amount when the coupon rate is:

• A) the same as the required rate of return
• B) higher than the required rate of return
• C) lower than the required rate of return
• D) lower than the inflation rate

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Definitions:

Underemployment

A situation in which workers are employed less than they wish or are overqualified for their jobs, resulting in their skills being underutilized.

Production Possibilities Frontier

A curve depicting the maximum viable combination of two products that can be produced in an economy, assuming all resources are fully and efficiently utilized.

Economize

To reduce expenses or to use resources carefully and efficiently to reduce waste and save money.

Full Production

The level of production where a company uses all its resources efficiently.