When the Market Rate of Interest Is Less Than the Contract

question 134

True/False

When the market rate of interest is less than the contract rate for a bond, the bond will sell for a premium.

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Definitions:

Full Force And Effect

A legal term indicating that all terms of a contract or law are currently active and enforceable.

Financing

The act of providing funds for business activities, making purchases, or investing.

Discharged By Frustration

A contract termination because an unforeseen event makes contractual obligations impossible to perform or drastically changes the party's principal purpose for entering into the contract.

Anticipatory Breach

An indication that one party intends not to fulfil their contractual obligations before the time of performance is due.