Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $139,609.

B) $186,410.

C) $214,877.

D) $200,000.

Answer: B

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 6%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $163,200.

B) $186,410.

C) $214,878.

D) $200,000.

Answer: C

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond (rounded to nearest whole dollar? (Use a financial calculator or Excel)

A) $139,609.

B) $186,410.

C) $214,877.

D) $200,000.

Answer: B

Seaside issues a bond with a stated interest rate of 10%, face value of $50,000, and due in 5 years

Seaside issues a bond with a stated interest rate of 10%, face value of $50,000, and due in 5 years. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond (rounded to nearest whole dollar)?

A) $83,920.

B) $46,320.

C) $54,055.

D) $50,000.

Answer: C

A $500,000 bond issue sold for $510,000. Therefore, the bonds:

A) Sold at a premium because the stated interest rate was higher than the market rate.

B) Sold for the $500,000 face amount plus $10,000 of accrued interest.

C) Sold at a discount because the stated interest rate was higher than the market rate.

D) Sold at a premium because the market interest rate was higher than the stated rate.

Answer: A

A $500,000 bond issue sold for $490,000. Therefore, the bonds:

A) Sold at a discount because the stated interest rate was higher than the market rate.

B) Sold for the $500,000 face amount less $10,000 of accrued interest.

C) Sold at a premium because the stated interest rate was higher than the market rate.

D) Sold at a discount because the market interest rate was higher than the stated rate.

Answer: D