The Carrying Value of Bonds at Maturity Is Always Equal

question 37

Multiple Choice

The carrying value of bonds at maturity is always equal to:

• A)the amount of cash originally received in exchange for the bonds.
• B)the par value that the issuer pays the holder.
• C)the amount of discount or premium.
• D)the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium.
• E)$0.

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Definitions:

Overhead

The ongoing business expenses not directly attributed to creating a product or service, such as rent, utilities, and administrative costs.

Lowest Terms

The equivalent ratio having the smallest possible integers for its terms.

Division

A mathematical operation where one quantity is divided by another, resulting in a quotient and sometimes a remainder.

Administration Fee

A fee charged by an entity for the management services it provides.