If Bonds Are Issued at a Premium,the Face Interest Rate

question 67

Multiple Choice

If bonds are issued at a premium,the face interest rate is

• A)lower than the market rate of interest.
• B)higher than the market rate of interest.
• C)too low to attract investors.
• D)adjusted to a higher effective rate of interest.

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Definitions:

Legitimate Power

Authority that is officially granted to a leader or manager by an organization, recognized as rightful by those who are governed by it.

Authority

The power or right to give orders, make decisions, and enforce obedience.

Order

The arrangement or organization of people, tasks, or things following a particular sequence, pattern, or method.

Coercive Power

This refers to the ability of a person to force others to comply with orders or requests through threats, punishment, or negative consequences.