When the Market Rate of Interest on the Date Bonds

question 18

Multiple Choice

When the market rate of interest on the date bonds are issued is lower than the face rate of interest on the bonds:

• A)the proceeds from the issuance of the bonds will be less than the face value of the bonds
• B)the bonds are issued at a premium
• C)the bonds are issued at a discount
• D)both a and c are correct

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Definitions:

Combinations

The selection of items from a collection, such that the order of selection does not matter, often used in probability and statistics.

Distinguishable

The quality of being clearly different or distinct in character or appearance, making something recognizable or understandable.

Ordered Arrangements

Refers to the organization of elements in a specific sequence where the order of these elements is important.

Probability

An estimation of the chances that an event will transpire, articulated as a number from 0 to 1.