The Interest Rate Specified in the Bond Indenture Is Called

question 66

Multiple Choice

The interest rate specified in the bond indenture is called the

• A) discount rate
• B) contract rate
• C) market rate
• D) effective rate

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Definitions:

360-Day Year

A financial calculation assumption where the year is considered to have 360 days for simplifying interest related calculations.

Ordinary Simple Interest

Interest calculated on the principal amount of a loan or investment based on a simple interest rate, without the compounding factor.

360-Day Year

An accounting approximation that treats all months as having 30 days, used in calculating interest with a simplified approach.

Ordinary Simple Interest

Interest calculated on the principal amount of a loan or deposit, based on a simple interest rate over a specified period.