Chapter 14, Problem 14.7BE

Bond Terminology. Match each term with its definition or explanation. Terms can be used more than once.

Term	Definition/Explanation
a. Face value	_________ Frequency with which cash interest payments are made to the bondholders
b. Premium	Nominal rate
C. Maturity date	Principal
d. Discount	Occurs when a bond issue is priced below par value
e. Interest payment period		Occurs when the effective interest rate is higher than the stated interest Rate
f. Stated interest rate	Par value
g. Market rate	_________________ Occurs when a bond issue is priced above par value
	_________ Amount of interest that the bond issuer will pay in cash expressed as an annual rate
	__________ Occurs when the effective interest rate is lower than the stated interest rate
	________ Face rate
	__________ Actual return that the investors will receive
	__________ Specified date when the bond issuer must pay the face
	value of the bonds to the bondholders
	___ Coupon rate
	__________ The amount that the company will pay the bondholder at maturity