A Put Bond Is Generally Putable At

question 54

Multiple Choice

A put bond is generally putable at:

• A) a premium.
• B) a discount.
• C) par value.
• D) the current market price.
• E) the yield to maturity.

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Definitions:

Zero-Coupon Bond

A type of bond that does not pay periodic interest and is sold at a discount from its face value, with the full face value being paid at maturity.

Implicit Interest

The interest represented by the difference between the cash price of a product and the amount financed over time, not directly stated as an interest rate.

Face Value

The nominal or dollar value of a security stated by the issuer, which is the amount paid back to the holder at maturity.

Zero-Coupon Bond

A type of bond that does not pay periodic interest payments and is sold at a discount from its face value, with the full face value being paid at maturity.