Which of the Following Statements About a Bond That Is

question 106

Multiple Choice

Which of the following statements about a bond that is selling at a discount is correct?

• A)Because the coupon rate remains constant, the market value of the bond also remains constant throughout its life.
• B)The market price of the bond will be greater than the bond's face value.
• C)The market price of the bond will increase and will approach its face value as the maturity date gets closer.
• D)Both the market price of the bond and the interest received will increase as the maturity date nears.
• E)The par value of the bond will increase with every increase in the market price of the bond until the maturity date is reached.

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Definitions:

Restricted Interest

Intense focus or fascination on a narrow area of interest, often observed in individuals with autism spectrum disorders.

Narcissistic Personality Disorder

A disorder marked by a grandiose sense of self-importance, a sense of entitlement, and an excessive need for attention and admiration.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification and diagnostic guide used by mental health professionals.

Diagnostic Criteria

A set of symptoms and signs used to determine the presence of a particular disease or condition.