Bond X and Bond Y Both Are Issued by the Same

question 218

Multiple Choice

Bond X and bond Y both are issued by the same company. Each of the bonds has a maturity value of $100,000 and each matures in 10 years. Bond X pays 8% interest while bond Y pays 9% interest. The current market rate of interest is 8%. Which of the following is correct?

• A) Both bonds sell for the same amount.
• B) Bond X sells for more than bond Y.
• C) Bond Y sells for more than bond X.
• D) Both bonds sell at a discount.

---

Definitions:

Tuition Payments

Financial charges paid to educational institutions for instruction and other services, often essential for enrollment and attendance.

Capitalist System

An economic system based on private ownership of the means of production and the creation of goods or services for profit.

Own Labor

A concept referring to the work performed by an individual that directly benefits themselves, typically not for an employer or for wages.

Commodities

Goods or services that are traded, bought, or sold.