Which of the Following Statements Is TRUE of a Bond

question 63

Multiple Choice

Which of the following statements is TRUE of a bond that is issued at a discount?

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

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Definitions:

Break-even Sales

The amount of revenue needed to cover a business's total fixed and variable costs, marking the point at which a business neither makes a profit nor a loss.

Unit Variable Cost

The cost associated with producing one additional unit of a product, varying with the volume of production.

Wage Contract

An agreement between an employer and an employee that stipulates the terms of employment, including pay rate and job responsibilities.

Variable Costs Per Unit

Costs that vary with the level of production or sales volume, calculated on a per-unit basis.