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Most of the Time,the Interest Rate on Treasury Notes and Bonds

question 29

Multiple Choice

Most of the time,the interest rate on Treasury notes and bonds is ________ that on money market securities because of ________ risk.

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Definitions:

Discount Amortized

Discount amortized refers to the gradual reduction or write-off of the discount on bonds payable over the life of the bond, thus increasing the bond's carrying value on the balance sheet over time.

Interest Payable

The amount of interest that a borrower owes to a lender at a specific point in time but has not yet paid.

Contract Rate

The interest rate specified in a contract, such as a loan agreement or bond indenture.

Market Rate

The prevailing price or rate at which goods, services, or securities are traded in an open market.

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