A Bond Is Sold for an Amount Higher Than Face

question 54

Multiple Choice

A bond is sold for an amount higher than face value.Which of the following statements would explain why?

• A) The bond's stated rate is lower than the prevailing market rate at time of sale.
• B) The bond's stated rate is the same as the prevailing market rate at time of sale.
• C) The bond's stated rate is higher than the prevailing market rate at time of sale.
• D) The bond is not secured by specific assets of the issuer.

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Definitions:

Business Objectives

Specific and measurable goals set by a business as part of its planning process, aimed at achieving its overall mission.

Cost Effective

A term describing an action or method that provides good value or outcome for the resources invested.

Key Decision Makers

Individuals or groups who have the authority to make critical decisions within an organization or project.

Medium

A means or instrumentality for storing or communicating information.