A Bond Issue with a Face Amount of $500,000 Bears

question 9

Multiple Choice

A bond issue with a face amount of $500,000 bears interest at the rate of 10%.The current market rate of interest is also 10%.These bonds will sell at a price that is:

• A)Equal to $500,000.
• B)More than $500,000.
• C)Less than $500,000.

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Definitions:

Consideration

Something of value (such as money, service, promise, or goods) that is given by both parties to a contract that compels mutual obligation.

Charitable Purpose

involves activities carried out for the benefit of the public, such as alleviating poverty, advancing education, religion, or other activities serving the public interest.

Promised Gift

A commitment to transfer ownership of an item or property to someone else without expecting something in return.

Consideration

A value promised in a contract that each party agrees to exchange, which is necessary for a valid agreement.