Which of the Following Statements Is True of a Bond

question 20

Multiple Choice

Which of the following statements is true of a bond that is issued at a premium?

• A)It will be sold above par.
• B)Its stated interest rate is lower than the prevailing market rate.
• C)It will repay a greater amount than the face value at maturity.
• D)It will be sold at par.

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Definitions:

Signed By The Principal

An act where the main party in a transaction or legal document formally endorses it, validating its terms or agreement.

Fiduciary Duty

The legal obligation to act in another party's best interest, often found in relationships involving trust, like between a lawyer and client or shareholder and company director.

Relationship Of Trust

A fiduciary association between parties, where one party places trust and confidence in another who has a duty to act for the former's benefit.

Secret Profit

Earnings or benefits gained by an individual, typically in a position of trust, without the knowledge or approval of those entitled to know about such gains.