If the Par Value of a Bond Is $200,and the Bid

question 22

Multiple Choice

If the par value of a bond is $200,and the bid price of the bond is $90,it implies:

• A)the bond is sold at $110.
• B)the bond was bought at $110.
• C)the bond is trading at a discount of 10 percent of its par value.
• D)the bond is trading at 45 percent of its par value.
• E)the bond is trading at a premium of 15 percent.

---

Definitions:

Capital

Financial resources or assets owned by an individual or business, used to fund operations, invest in business ventures, or acquire assets.

Liabilities

Monetary commitments or liabilities that a business is responsible for repaying to others in the future.

Revenue

The total income generated from normal business operations, including sales of goods and services before any expenses are deducted.

Expanded Accounting Equation

An extension of the basic accounting equation that includes components such as owner's equity, retained earnings, and dividends.