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Which of the Following Is Correct with Respect to Bonds

Question 265

Multiple Choice

Which of the following is correct with respect to bonds?


A) The market value (selling price) of a bond at any given time is determined solely by its stated interest rate.
B) A bond with a higher stated interest rate than the "going rate" on similar quality bonds will probably sell at a price below its face value.
C) A bond with a sinking fund provision is riskier than a bond without such a provision.
D) The amount of the premium or discount on a bond depends largely on how far in the future the maturity date is.
E) None of these are correct; bond prices are influenced by too many factors to make simple statements.

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