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:

Community Property

A form of concurrent property ownership in which each spouse owns an undivided one-half interest in property acquired during the marriage.

Undivided Interest

A share in property ownership rights where each owner's portion is not physically divided from the others.

Fixed-Term Tenancy

A legal agreement in which a property is leased for a specific period of time.

Express Contract

A legally binding agreement where the terms are clearly stated either verbally or in writing by the parties involved.