Which of the Following Statements Is True If a Bond

question 97

Multiple Choice

Which of the following statements is true if a bond is sold for an amount higher than face value?

• 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:

Law of Demand

States that, all other factors being equal, as the price of a good increases, demand for that good decreases, and vice versa.

Quantity Demanded

The amount of a good or service that consumers are willing and able to purchase at a specific price.

Price

The amount of money required to purchase a good or service, determined by factors such as supply and demand.

Normal Good

A type of good for which demand increases when income increases, demonstrating a direct relationship between income and demand.