When a Bond Sells at a Discount,its Stated Interest Rate

question 241

Multiple Choice

When a bond sells at a discount,its stated interest rate is ________.

• A)equal to the market rate of interest
• B)greater than the market rate of interest
• C)less than the market rate of interest
• D)irrelevant to investors

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Definitions:

Issued

Issued generally refers to the official distribution or release of items such as documents, currency, or securities by an authoritative entity.

Declared

Stated or made known officially or publicly.

Unit Of Account

A standard numerical monetary unit of measurement of the market value of goods, services, and other transactions.

Function

In mathematics, a relation between a set of inputs and a set of permissible outputs with the property that each input is related to exactly one output.