What Causes Bonds to Sell for a Premium Compared to Face

question 33

Multiple Choice

What causes bonds to sell for a premium compared to face value?

• A) The bonds have high ratings.
• B) The bonds have a long period until maturity.
• C) The bonds have a higher than market coupon rate.
• D) The bonds are of speculative grade.

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Definitions:

Limbic System

Group of structures deep in the brain that function in emotion.

Emotions

Complex psychological states that involve physiological arousal, feelings, cognitive processes, and behavioral reactions.

Synaptic Cleft

The tiny gap at a synapse where neurotransmitters are released from one neuron to signal the next neuron.

Enzymatic Breakdown

The process of breaking down complex molecules into simpler ones via the catalytic action of enzymes.