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A Bond Has a $1,000 Par Value, Makes Annual Interest

question 49

True/False

A bond has a $1,000 par value, makes annual interest payments of $100, has 5 years to maturity, cannot be called, and is not expected to default.The bond should sell at a premium if interest rates are below 10% and at a discount if interest rates are greater than 10%.


Definitions:

Obedience

The act of following orders or instructions from someone in authority, often without questioning them.

Expert Power

The influence one possesses as a result of their expertise, skill, or knowledge, which persuades others to follow their lead.

Informational Power

Power derived from the possession, control, or access to information that is needed or valued by others.

Reward Power

Reward power is a form of social influence based on the ability to control the allocation of rewards valued by others, thereby modifying their behavior in a desired direction.

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