Your Company Is Planning to Issue $1,000 Bonds with a Stated

question 82

Multiple Choice

Your company is planning to issue $1,000 bonds with a stated interest rate of 7% and a maturity date of July 15,2022.If interest rates rise in the economy so that similar financial investments pay 9%,your company will:

• A)not be able to issue the bonds because no one will buy them.
• B)receive a higher issue price to compensate buyers for the lower stated interest rate.
• C)have to accept a lower issue price to attract buyers.
• D)have to reprint the bond certificates to change the stated interest rate to 9%.

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Definitions:

Ethological

Pertains to the scientific study of animal behavior, particularly in natural environments, focusing on the evolutionary implications of behavior.

Psychoanalytic

Pertaining to a theory of psychology and method of psychotherapy, originally developed by Sigmund Freud, emphasizing unconscious mental processes and early childhood experiences in shaping behavior and personality.

Cognitive

Pertaining to the mental processes involved in acquiring knowledge and understanding through thought, experience, and the senses.

Superego

Represents one of the three components of the mind in Freudian psychoanalytic theory, acting as the moral conscience that incorporates the values and norms of society.