A Bond with a Par Value of $1,000 Trading at 101½

question 186

True/False

A bond with a par value of $1,000 trading at 101½ sells for a premium.

---

Definitions:

Accumulate

To gather or collect over a period of time, often referring to interest, investments, or assets.

Quarterly Basis

A period or system where certain operations or calculations, such as financial reports or interest payments, are done every three months.

Compounded Monthly

Interest calculation method where interest earned is added to the principal so that, from that moment on, the interest that has been added also earns interest.

Equal Contributions

A setup where all participants in a financial arrangement contribute the same amount.