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

question 151

Multiple Choice

A $30,000 bond issue with a stated rate of interest of 6%, when the market rate of interest is 7%, means that the bond will be sold for:

• A)$30,000
• B)more than $30,000.
• C)less than $30,000.
• D)the maturity value.

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Definitions:

Negotiable Instrument

A document in writing that promises to pay a certain sum of money, either upon request or at a predetermined date, with the person responsible for payment identified on the document.

Unconditional Promise

A commitment or guarantee that is not subject to any conditions or stipulations.

Agreement to Sell

An agreement to sell indicates a mutual understanding or contract between parties to transfer property or goods from seller to buyer in the future.

Expiry Dates

Specified dates after which a product is no longer considered safe or effective to use, or a period is considered to have ended.