Which of the Following Is Correct with Respect to Bonds

question 265

Multiple Choice

Which of the following is correct with respect to bonds?

• A) The market value (selling price) of a bond at any given time is determined solely by its stated interest rate.
• B) A bond with a higher stated interest rate than the "going rate" on similar quality bonds will probably sell at a price below its face value.
• C) A bond with a sinking fund provision is riskier than a bond without such a provision.
• D) The amount of the premium or discount on a bond depends largely on how far in the future the maturity date is.
• E) None of these are correct; bond prices are influenced by too many factors to make simple statements.

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Definitions:

Consent

This refers to the agreement or permission given by a person for something to happen or for someone to do something, typically requiring full understanding and willingness.

Punitive Damages

Financial compensation awarded to a plaintiff that goes beyond what is necessary to compensate for losses and is intended to punish the defendant for egregious conduct.

Defendant

The person, party, or entity against whom a civil or criminal lawsuit is filed in a court of law.

Slander

The act of making false and damaging spoken statements about someone, leading to harming their reputation.