Bonds That Sell for Much Less Than Face Value and Pay

question 26

Multiple Choice

Bonds that sell for much less than face value and pay no coupon are called:

• A)original issue discount bonds.
• B)deep discount bonds.
• C)pure discount bonds.
• D)zero coupon bonds.
• E)All of the above.

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Definitions:

Cash Balance

The amount of cash a company or individual has available after all transactions have been accounted for.

Withdrawal

The act of taking money from an account, or the removal of assets or resources, often applicable in banking and partnerships.

Telephone Bill

A telephone bill is a periodic charge levied on individuals or businesses for the use of telecommunication services.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, leading to net profit or loss.