If the Market Rate of Interest Is

Multiple Choice

If the market rate of interest is

A) greater than the stated rate, the debt's carrying value will equal face value.
B) equal to the stated rate, the debt's carrying value will increase to face value over time.
C) greater than the stated rate, the debt's carrying value will increase to face value over time.
D) less than the stated rate, the debt's carrying value will equal face value.
E) greater than the stated rate, the debt's carrying value will decrease to face value over time.