If an Issuer Sells a Bond at Any Other Date

question 159

Multiple Choice

If an issuer sells a bond at any other date than the interest payment date:

• A)This means the bond sells at a premium
• B)This means the bond sells at a discount
• C)The issuing company will report a loss on the sale of the bond
• D)The issuing company will report a gain on the sale of the bond
• E)The buyer normally pays the issuer the purchase price plus any interest accrued since the prior interest payment date

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Definitions:

Loopholes

Provisions in laws or regulations that allow individuals or companies to avoid abiding by the spirit of the law in a legal way.

Economic Performance Philosophy

An approach focusing on achieving long-term economic goals such as sustainability, growth, and efficient resource allocation.

GAAP

Known as Generally Accepted Accounting Principles, this is a group of standard accounting rules and practices used for financial reporting.

IFRS

The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.