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Home / Questions / A $500,000 bond issue sold for $490,000 Therefore, the bonds a.Sold at a discount because...

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

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 of was higher than the market rate.

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

 

 

65. For a bond issue that sells for more than the bond face amount, the stated interest rate is:

a.The actual yield rate.

b.The prime rate.

c.More than the market rate.

d.Less than the market rate.

 

 

 

66. For a bond issue that sells for less than the bond face amount, the stated interest rate is:

a.The actual yield rate.

b.The prime rate.

c.More than the market rate.

d.Less than the market rate.

 

 

67. Bond X and Bond Y are both issued by the same company. Each of the bonds has a face value of $100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y pays 7% interest. The current market rate of interest is 7%. Which of the following is correct?

a.Both bonds will sell for the same amount.

b.Bond X will sell for more than Bond Y.

c.Bond Y will sell for more than Bond X.

d.Both bonds will sell at a premium.

 

 

68. Bond X and Bond Y are both issued by the same company. Each of the bonds has a face value of $100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y pays 9% interest. The current market rate of interest is 8%. Which of the following is correct?

a.Both bonds will sell for the same amount.

b.Bond X will sell for more than Bond Y.

c.Bond Y will sell for more than Bond X.

d.Both bonds will sell at a discount.

 

 

69. 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 12%. What is the issue price of the bond?

a.

$83,920.

b.

$46,320.

c.

$53,605.

d.

$50,000.

 

 

70. 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?

a.

$83,920.

b.

$46,320.

c.

$54,055.

d.

$50,000.

 

 

71. Given the information below, which bond(s) will be issued at a discount?

 

Bond 1

Bond 2

Bond 3

Bond 4

Stated Rate of Return

5%

7%

12%

10%

Market Rate of Return

7%

8%

12%

9%

 

a.

Bond 1.

b.

Bond 2.

c.

Bond 4.

d.

Bonds 1 and 2.

 

 

72. Given the information below, which bond(s) will be issued at a premium?

 

Bond 1

Bond 2

Bond 3

Bond 4

Stated Rate of Return

5%

10%

7%

10%

Market Rate of Return

7%

8%

7%

9%

 

a.

Bond 1.

b.

Bond 2.

c.

Bond 3.

d.

Bonds 2 and 4.

 

 

73. Given the information below, which bond(s) will be issued at a discount?

 

Bond 1

Bond 2

Bond 3

Bond 4

Stated Rate of Return

10%

8%

12%

12%

Market Rate of Return

12%

8%

15%

10%

 

a.

Bond 1.

b.

Bond 3.

c.

Bonds 2 and 4.

d.

Bonds 1 and 3.

Jan 27 2020 View more View Less

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