18. A bond issued for a premium indicates that at the date of issue A) its contr

Question

18. A bond issued for a premium indicates that at the date of issue A) its contract rate was lower than the prevailing market rate of interest on similan bonds. B) its contract rate was equal to the prevailing market rate of interest on C) the bonds were issued at a price greater than their face valuc D) the bonds are noninterest-bearing. similar bonds 19. A bonds contract rate of immerest is also called: A) All of the other terms B) the stated rate C) the coupon rate D) the nominal rate A bond's market rate of interest is also called A) only the effective rate B) only the yield rate 20. D) None of the terms listod in the other answers Page 5

Explanation / Answer

Solution:-

18. Answer is C.

Reason:-

When Bonds issued at Premium, in this premium denotes the amount receievd over and above the face value of the bond. Hence issue price is more then the face value of bond.

19.

Answer is C

Reason:- Interest of Bond is also called as coupan Rate of the Bonds

20.

Answer is C.

Reason;- Bonds Market rate of interest is also called as Effective Interest rate or Yield Rate of Interest.

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