A Premium Bond Is Defined as a Bond That

question 39

Multiple Choice

A premium bond is defined as a bond that:

• A) has a duration that is less than 1.0.
• B) has a face value that exceeds its market value.
• C) is callable at a price which exceeds the face value.
• D) has a market price that exceeds par value.
• E) is selling for less than face value.

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Definitions:

Gross Price Method

An accounting method where inventory purchases are recorded at their gross price, without deducting any available cash discounts.

Net Realizable Value

The estimated selling price of goods, less the costs of their sale or disposal.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect because customers default on payments.

Operating Expense

Costs necessary for maintaining the day-to-day operations of a business, excluding costs associated with the production of goods or services.