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The Effective Interest Method of Amortization of Bond Premiums and Discounts

Question 31

Multiple Choice

The effective interest method of amortization of bond premiums and discounts is superior to the straight-line method because it results in a(n)


A) more variable interest rate.
B) uniform rate of interest.
C) interest rate that increases or decreases slightly over time.
D) interest rate that is close to the market interest rate.

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