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A callable bond allows the person holding the bond to redeem it before its maturity date for the par
value.
a. true
b. false
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- A callable bond: Select one: a. can be paid off early at either the issuer's or the bondholder's request b. can have its maturity date extended by the issuer c. can be redeemed early if the bondholder so requests d. can be redeemed by the issuer prior to maturity e. is a bond that pays a variable interest paymentAt a bond's maturity, the bond issuer pays the bondholder the par value of the bond. True or False True FalseA bond that has only one payment, which occurs at maturity, defines which one of these types of bonds?
- When a bond sells at a discount, the carrying value ________ after each amortization entry. A. increases B. decreases C. stays the same D. cannot be determinedThe effective-interest method of bond amortization finds the difference between the ________ times the ________ and the ________ times the ________. A. stated interest rate, principal, stated interest rate, carrying value B. stated interest rate, principal, market interest rate, carrying value C. stated interest rate, carrying value, market interest rate, principal D. market interest rate, carrying value, market interest rate, principal1. To calculate a gain or loss on redemption of a bond, you compare a. The market interest rate to the contract rate b. The carrying value value of the bond to the proceeds received from the sale of the bond c. The income for the period d. The proceeds to the unamortized premium or discount 2. If the proceeds are greater than the carrying value, you will have a a. gain with a credit balance b. gain with a debit balance c. loss with a debit balance d. loss with a credit balance
- Please see attached. Definitions: Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity.When the bond interest rate > the market rate, the bonds are issued at a discount. Select one: O True O FalsePlease see attached. Definition: Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity.
- Which type of bond- a mortgage bond, a debenture, or a subordinated debenture- generally has the a. Highest cost to the bond issuer? B. least risk to the bond holder? c. highest yield to the bond holder?If the market rate of interest is greater than the contractual rate of interest, bonds will sell a. at a discount b. only after the stated rate of interest is increased c. at a premium d. at face value4. When the market rate of interest is greater than the contract rate ofinterest, the bonds should sell at a. a premium b. par value c. a discount d. par value