Which Is the Preferred Method to Use When Amortizing a Bond

question 10

Multiple Choice

Which is the preferred method to use when amortizing a bond discount or premium?

• A)Market-interest rate method of amortization
• B)Straight-line method of amortization
• C)Effective-interest method of amortization
• D)Both straight-line and market-interest rate methods of amortization are equally preferred.

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Definitions:

Sigmund Freud

An Austrian neurologist known for founding psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Behaviourist

A psychologist who studies and practices behaviorism, emphasizing the importance of observable actions and behaviors over internal processes like thoughts and emotions.

Phenomenology

The study of structures of consciousness as experienced from the first-person point of view.

Observable Behaviour

Actions or reactions that can be seen or measured, often used in behavioural research or analysis.