Question 2 (1 point) Which of the following statements is True? Question 2 options: The Present worth of a bond is the value of the annuity converted to Present Value The present worth of a bond will increase if the market interest rates decrease Annuity for Bonds is calculated using the market interest rate The Face Value is the amount paid for the bond when issued
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Which of the following statements relating to bonds is incorrect? A. A bond's face value is the amount the issuer must pay to the bondholder at maturity. B. The owner of a registered bond is the person to whom interest payments are mailed. C. A bond will typically sell at a discount when its nominal rate is less than the current market rate of interest. D. A bond is a debt instrument giving the issuer flexibility as to the maturity date.
Madhur L.
Akash M.
Point 1: The present value decreases as the time period increases and the interest rate is inversely related to the future value. Pont 2: An annuity due has payments that occur at the beginning of each time period. The present value of an annuity will increase when either the amount of the annuity payment increases or the interest rate increases. Point 3: A premium bond has a coupon rate that exceeds the yield to maturity and the market price that exceeds the face value. When a bond’s yield to maturity is greater than the bond’s coupon, the bond is selling at a discount. Point4: Municipal bonds generally have a lower coupon rate than comparable corporate bonds and are appealing to individuals with low marginal tax rates. which are true? Which are false?
Penny R.
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