Which of the Following Statements Is True of a Bond

question 104

Multiple Choice

Which of the following statements is true of a bond that is issued at a premium?

• A)The bond will be issued at an amount above face value.
• B)The stated interest rate is lower than the prevailing market interest rate.
• C)At maturity,the bond will repay an amount that is greater than the face value.
• D)The bond will be issued at par.

---

Definitions:

Rational Individual

Refers to a person who makes choices that maximize their personal benefit or utility, based on their own preferences and available information.

Charity

An act of giving help, typically in the form of money or goods, to those in need.

Predicts Well

"Predicts well" refers to the accuracy and reliability with which a model or method can forecast future events or outcomes based on current or past data.

Economic Model

A simplified representation of economic processes, typically using mathematical formulas or graphs, to understand and predict economic behaviors.