A $30,000 Bond Issue with a Stated Interest Rate of 5

question 97

Multiple Choice

A $30,000 bond issue with a stated interest rate of 5%, when the market rate of interest is 6%, means that the bond will sell for:

• A)$30,000
• B)more than $30,000.
• C)less than $30,000.
• D)$40,000

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Definitions:

Modify Existing Products

The process of making alterations or improvements to current products to meet new requirements or take advantage of new market opportunities.

New-to-the-world Products

Innovations that create an entirely new market by being the first of their kind.

Late Majority

The last group of buyers to enter a new product market; when they do, the product has achieved its full market potential.

Early Adopters

The second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don’t like to take as much risk as innovators but instead wait and purchase the product after careful review.