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You are watching: If the market interest rate is greater than the contractual interest rate, bonds will sell


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the interemainder rate specified in the bond indenture is dubbed thediscount ratecontract rateindustry rateeffective rate
a legal document that indicates the name of the issuer, the face worth of the bond and such various other data is calledtrading on the equityconvertible bonda bond debenturea bond indenture
bonds that are topic to retirement before maturity at the alternative of the issuer are calleddebenturescallable bondsearly on retirement bondsoptions
marketing the bonds at a premium has the impact of / raising the effective interemainder price above the declared interemainder rate/ attracting investors that are willing to pay a reduced rate of interest than on similar bonds/ resulting in the interest price to be higher than the bond interest paid/ causing the interemainder price to be lower than the bond interest paid
if bonds are issued at a discount, it indicates that the/ bondholder will certainly receive successfully much less interest than the contractual rate of interest/ industry interest rate is lower than the contractual interemainder rate/ market interemainder rate is better than the contractual interest rate/ financial strength of the issuer is suspect
the straight-line technique is embraced for the amortization of bond discount or premium. Which of the following statements is true?- the amount of the annual interemainder price is computed at 10% of the bond transporting amount at the beginning of the year- the amount of the yearly interemainder price slowly decreases over the life of the bonds-the amount of unamortized discount decreases from its balance at issuance day to a zero balance at a maturity- the bonds will certainly be issued at a premium
the amount of unamortized discount decreases from its balance at issuance day to a zero balance at maturity
if the market rate of interest is greater than the contractual rate of interest, bonds will sell- at a premium- at confront value- at a discount- only after the proclaimed rate of interemainder is increased
the interest cost videotaped on an interest payment is increased- only if the market price of interest is less than the proclaimed rate of interemainder on that date- by the amortization of premium on bonds payable- by the amortization of discount on bonds payable- just if the bonds were sold at face value
if the industry price of interemainder is 10%, a 10,000, 12%, 10-year bond that pays interest semiannually would sell at the amount- less than the face value- equal to the challenge value- a higher than face value- that cannot be determined
if bonds are issued at a premium, the stated interemainder is- greater than the industry price of interest- lower than the industry price of interest- as well low to tempt investors- changed to a greater rate of interest
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