15 the interest rate on which cash payments to bondholders are based is the a market 4306993

15) The interest rate on which cash payments to bondholders are based is the:

A) market rate.

B) discount rate.

C) stated rate.

D) amortization rate.

16) An instrument that matures at one specified time is known as a:

A) preferred share.

B) common share.

C) bond.

D) letter of credit.

17) Which of the following describes a serial bond?

A) a bond that repays principal in installments

B) a bond that gives the bondholder a claim for specific assets if the issuer fails to pay

C) a bond that matures at one specified time

D) a bond that is not backed by specific assets

18) Which of the following describes a secured bond?

A) a bond that repays principal in installments

B) a bond that gives the bondholder a claim for specific assets if the issuer fails to pay principal or interest

C) a bond that matures at one specified time

D) a bond that is not backed by specific assets

19) Which of the following describes a debenture?

A) a bond that repays principal in installments

B) a bond that gives the bondholder a claim for specific assets if the issuer fails to pay principal or interest

C) a bond that matures at one specified time

D) a bond that is not backed by specific assets

20) Which of the following statements is true of a bond that is issued at a discount?

A) It will be sold at par.

B) Its stated interest rate is higher than the prevailing market rate.

C) It will repay a lesser amount than the face value at maturity.

D) It will be sold for less than the face value.

21) Which of the following statements is true of a bond that is issued at a premium?

A) It will be sold above par.

B) Its stated interest rate is lower than the prevailing market rate.

C) It will repay a greater amount than the face value at maturity.

D) It will be sold at par.

22) If bonds with a face value of $200,000 are sold at 98, the amount of cash proceeds is:

A) $202,000.

B) $200,000.

C) $196,000.

D) $192,157.

23) If bonds with a face value of $200,000 are sold at par, the amount of cash proceeds is:

A) $202,000.

B) $200,000.

C) $196,000.

D) $192,157.

24) If bonds with a face value of $200,000 are sold at 105, the amount of cash proceeds is:

A) $209,523.

B) $200,000.

C) $190,476.

D

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