A Discount Bond That Pays Interest Semiannually Will

question 70

Multiple Choice

A discount bond that pays interest semiannually will:
I. Have a lower price than an equivalent annual payment bond
II. Have a higher EAR than an equivalent annual payment bond
III. Sell for less than its conversion value

• A) I and II only
• B) I and III only
• C) II and III only
• D) I, II, and III

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