If the market rate of sell at an amount interest is 10%, a $10,000, 12%, 10-year bond that pays interest semiannually would
1. MC.14-90
If the market rate of sell at an amount interest is 10%, a $10,000, 12%, 10-year bond that pays interest semiannually would
equal to the face value
greater than face value
less than face value
that cannot be determined
Homework Answers
Ans. Option 2nd
Explanation: If the market interest rate is lower than the contractual interest rate it means the bonds will sell on premium. So, the sell amount would be greater than the face value.
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