Carrying Value Is Computed Annually When a Bond Is Issued

question 177

Multiple Choice

Carrying value is computed annually when a bond is issued for other than its face value.For a bond issued at a premium,how will this component change as the bond approaches maturity?

• A)Decrease
• B)Increase
• C)Remain constant
• D)Not enough information given to decide

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Definitions:

Demand Curve

It represents the relationship between the price of a good or service and the quantity demanded by consumers over a certain period of time.

Quantity Demanded

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

Price

The amount of funds needed to purchase a commodity, service, or asset.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers.