If a Bond's Stated Interest Rate Is Higher Than the Market

question 73

Multiple Choice

If a bond's stated interest rate is higher than the market rate, which of the following is true?

• A)The bond will be issued at a premium.
• B)The bond will be issued at par.
• C)The bond will be issued at a discount.
• D)The bond will be issued for an amount lower than the maturity value.

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Definitions:

Income

Financial gains received from work or investments, usually on a consistent basis.

Demand

The quantity of a good or service consumers are willing and able to purchase at a given price level.

Curds

The coagulated part of milk separated from the whey during the process of making cheese or paneer.

Utility Function

(rephrased) is an economic model illustrating how different combinations of goods or services provide varying levels of happiness or satisfaction to an individual.