Multiple Choice
In theory (disregarding any other marketplace variables) the proceeds from the sale of a bond will be equal to:
A) The face amount of the bond plus the present value of the interest payments made during the life of the bond discounted at the prevailing market rate of interest.
B) The present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond, each discounted at the prevailing market rate of interest.
C) The present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond, each discounted at the stated rate of interest.
D) The sum of the face amount of the bond and the periodic interest payments.
Correct Answer:
Verified
Correct Answer:
Verified
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