A Bond Is Issued at $1,000 Par Value During a Time

question 180

Multiple Choice

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness have a 10% interest rate.Which of the following is most likely to be true about the bond?

• A) It is currently selling for a premium.
• B) It is currently selling at a discount.
• C) It is currently selling at par.
• D) The bond is likely to be called.
• E) None of the above

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Definitions:

Respondents' Anonymity

A principle in research and surveys ensuring that the identities of participants are not connected with the information they provide.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Numerical Measure

A quantitative representation of data or characteristics expressed in numbers.

Two Variables

A situation or analysis involving two distinct factors or elements that may or may not influence each other.