A Bond Will Sell ________ When the Stated Rate of Interest

question 65

Multiple Choice

A bond will sell ________ when the stated rate of interest exceeds the required rate of return, ________ when the stated rate of interest is less than the required return, and ________ when the stated rate of interest is equal to the required return.

• A) at a premium; at a discount; equal to the par value
• B) at a premium; equal to the par value; at a discount
• C) at a discount; at a premium; equal to the par value
• D) equal to the par value; at a premium; at a discount

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Definitions:

Domestic Supply

The total amount of goods and services that are produced within a country's borders and available for domestic consumption or export.

International Specialization

A method where countries or regions focus on producing goods and services they are most efficient at, to enhance global trade efficiency.

Economies Of Scale

The reduction in cost per unit of goods or services produced as the scale of output increases.

World Price

The international market price of a commodity, determined by global supply and demand conditions.