Ask Question
BusinessBusiness
7 May, 11:43

Which of the following statements is true of a bond that is issued at a premium?

A. At maturity, the bond will repay an amount that is greater than the face value.

B. The bond will be issued at par.

C. The stated interest rate is lower than the prevailing market interest rate.

D. The bond will be issued at an amount above face value

+2
Answers (1)
  1. 7 May, 14:32
    0
    D. The bond will be issued at an amount above face value

    Explanation:

    A premium bond trades at a price above its face value. For example, if the face value of a bond is $5000, but it is selling at a price above $5000, then it is a premium bond. At maturity, a bond bought at a premium will be paid the face value and not the premium value.

    Bond's interest rates are constant until maturity. Demand for a particular bond may drive its price higher. If investors expect the interest returns from the bond to be higher than the market interest payments, such a bond will trade at a premium.

    The bond that sells at a lower price than the face value is discount bond.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Which of the following statements is true of a bond that is issued at a premium? A. At maturity, the bond will repay an amount that is ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What is a good way to improve your marketing to employers?
Answers (1)
Rosa, roberto, andrea, and inno find an estimate for √10. who has proposed the best solution?
Answers (1)
Which sentence reflects the concept of "commaitis"? marion wants to take world history during second period, she wants to take it from ms. polson.
Answers (1)
As a result of the tax, the price received by producers, and. as a result of the tax, the price paid by consumers, and total consumer spending falls as long as demand is. true or false: consumer surplus rises if total consumer spending falls.
Answers (1)
Consider an economy that produces only DVDs and DVD players. Last year, 10th DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each.
Answers (1)
New Questions in Business
Railway Cabooses just paid its annual dividend of $3.90 per share. The company has been reducing the dividends by 12.4 percent each year.
Answers (1)
It's important to know whether you've paraphrased and cited source material for your paper correctly so you avoid plagiarism. Read the original quote below and the two attempts to paraphrase it.
Answers (1)
If the inflation rate increases faster than their income. True or False
Answers (1)
Which type of wan connection is not shared with other users and has continuously available communications channels?
Answers (1)
The Hondasaki Motorcycle Company has a normal two-stage absorption job-order costing system. They close over - or under-applied overhead directly into Cost of Goods Sold, and use expected production as their activity base.
Answers (1)
Home » Business » Which of the following statements is true of a bond that is issued at a premium? A. At maturity, the bond will repay an amount that is greater than the face value. B. The bond will be issued at par. C.
Sign Up Forgot Password?