Julie Owns a Bond with a $1000 Par Value

question 11

Multiple Choice

Julie owns a bond with a $1000 par value. If she decides to sell her bond on the secondary market before the maturity date, what might be the result?

• A) She could receive more or less than $1000, because the market price of bonds is free to fluctuate.
• B) She will receive exactly $1000, because that is the guaranteed value of the bond.
• C) She will receive more than $1000, because the bond will pay interest to the buyer, making it an attractive investment.
• D) She will receive less than $1000, because the only time the bond is worth the full par value is at maturity.

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Definitions:

Public Education

A universally accessible system funded and administered by government agencies aiming to provide free education to all children.

Property Taxes

Levies on property ownership, typically based on the property's value, used to fund local services such as schools, roads, and public safety.

Progressive Tax System

A taxation system where the tax rate increases as the taxable income increases, considered more equitable by distributing the tax burden according to ability to pay.

Marginal Tax Rate

The rate at which the next dollar of taxable income is taxed, reflecting the percentage of tax paid on the last dollar earned.