When a bond is sold at a discount, the cash received is less than the present va

Question

When a bond is sold at a discount, the cash received is less than the present value of the future cash flows from the bond, based on the market rate of interest on the date of issue. the cash received is more than the present value of the future cash (lows, the cash received is equal to the present value of the future cash flows. because the market rate of interest is used when calculating the present value of the future cash flows. the discount amount equals to the difference between the cash receded an. the present value of the cash flows.

Explanation / Answer

a)false - cash recieved in less than the present value of the future cash flows

b)false - if equal then it is issued at par

c)False - the interest rate is calculated at the stated rate and discounted at market rate

d)True-

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