Abraham Found a $1,000 Face Value Bond That Belonged to His

question 5

Multiple Choice

Abraham found a $1,000 face value bond that belonged to his father. He checked The Wall Street Journal and found the bond was currently selling for $1,220. This bond sells at a

• A) discount.
• B) premium.
• C) price that is overvalued.
• D) primary market.

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Definitions:

Agency

A relationship where one party, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Necessity

The condition or situation of being required or indispensable, often invoked in legal contexts where actions are taken out of an unavoidable need.

Contract

A legally binding agreement between two or more parties.

Warranty of Authority

An assurance provided by an agent to a third party that they have the authority to act on behalf of another person or entity in a legal or business transaction.