A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 8%. These bonds will sell at a price that is:
A) Equal to $500,000.
B) More than $500,000.
C) Less than $500,000.
D) The answer cannot be determined from the information provided.
Answer: C
A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 6%. These bonds will sell at a price that is:
A) Equal to $500,000.
B) More than $500,000.
C) Less than $500,000.
D) The answer cannot be determined from the information provided.
Answer: B
Serial bonds are:
A) Bonds backed by collateral.
B) Bonds that mature in installments.
C) Bonds with greater risk.
D) Bonds issued below the face amount.
Answer: B
