A Bond's Face Value Is $1,000

question 137

Multiple Choice

A bond's face value is $1,000. Garrett looks it up in the Wall Street Journal and finds it quoted at 87. How much will Garrett have to pay to purchase this bond?

• A) $1,000
• B) $913
• C) $87
• D) $1,087
• E) $870

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Definitions:

Investing Activity

A category in the cash flow statement that shows how much money has been spent on or gained from investment operations, excluding amounts related to day-to-day operations.

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for non-cash transactions, deferred income, and changes in working capital to compute net cash from operating activities.

Statement Of Cash Flows

A financial report summarizing the amount of cash and cash equivalents entering and leaving a company.

Book Value

The net value of a company's assets as recorded on its balance sheet, minus its liabilities and intangible assets, such as goodwill.