When a Bond Is Selling for Less Than Its Face

question 113

Multiple Choice

When a bond is selling for less than its face value, it is said to be selling at a:

• A)discount.
• B)premium.
• C)commission.
• D)conservative value.
• E)prospectus value.

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Definitions:

Quitclaim Deed

A legal instrument used to transfer interest in real property from one person or entity to another, without any warranty of title.

Warranty of Title

A guarantee in a sales contract that the seller has the legal right to transfer ownership and that there are no undisclosed liens or encumbrances on the property being sold.

Right of Redemption

A legal right that allows a borrower to reclaim their property after it has been sold at foreclosure by paying off the full debt amount, plus additional costs, within a specified timeframe.

Entire Debt

The total amount owed by a debtor, encompassing all outstanding obligations, not just a portion or installment.