A bond traded at 97½ means that a. The bond pays 97½% interest. b. The bond trades at $975 per $1,000 bond. c. The market rate of interest is below the contract rate of interest for the bond. d. The bonds can be retired at $975 each. e. The bond’s interest rate is 2½%.

Question

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Answer 1

Textbook Question

Chapter 14, Problem 1MCQ

A bond traded at 97½ means that

a. The bond pays 97½% interest.
b. The bond trades at $975 per $1,000 bond.
c. The market rate of interest is below the contract rate of interest for the bond.
d. The bonds can be retired at $975 each.
e. The bond’s interest rate is 2½%.

Expert Solution & Answer

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

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Answer 2

Textbook Question

Chapter 14, Problem 1MCQ

A bond traded at 97½ means that

a. The bond pays 97½% interest.
b. The bond trades at $975 per $1,000 bond.
c. The market rate of interest is below the contract rate of interest for the bond.
d. The bonds can be retired at $975 each.
e. The bond’s interest rate is 2½%.

Expert Solution & Answer

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

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Answer 3

Textbook Question

Chapter 14, Problem 1MCQ

A bond traded at 97½ means that

a. The bond pays 97½% interest.
b. The bond trades at $975 per $1,000 bond.
c. The market rate of interest is below the contract rate of interest for the bond.
d. The bonds can be retired at $975 each.
e. The bond’s interest rate is 2½%.

Expert Solution & Answer

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

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Answer 4

Textbook Question

Chapter 14, Problem 1MCQ

A bond traded at 97½ means that

a. The bond pays 97½% interest.
b. The bond trades at $975 per $1,000 bond.
c. The market rate of interest is below the contract rate of interest for the bond.
d. The bonds can be retired at $975 each.
e. The bond’s interest rate is 2½%.

Expert Solution & Answer

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

Answer 8

Expert Solution & Answer

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Ascertain the meaning if the bond is traded at 971/2.

Answer 12

Answer to Problem 1MCQ

Option b. The bond trades at $975 per $1,000 bond.

Answer 13

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Buying and selling of bond in the market at 971/2 means that the bond is traded at 97.5% or at

$975 per $1,000 bond and it is issued less than the face value of the bond ($975<$1,000).

Therefore, Option b. The bond trades at $975 per $1,000 bond is the correct option and the other options of a, c and d are incorrect.

Answer 14

Ch. 14 - A bond traded at 97 means that a. The bond pays...Ch. 14 - Prob. 2MCQ Ch. 14 - Prob. 3MCQ Ch. 14 - Prob. 4MCQ Ch. 14 - Prob. 5MCQ Ch. 14 - Prob. 1DQ Ch. 14 - Prob. 2DQ Ch. 14 - Prob. 3DQ Ch. 14 - Prob. 4DQ Ch. 14 - Prob. 5DQ

A bond traded at 97½ means that a. The bond pays 97½% interest. b. The bond trades at $975 per $1,000 bond. c. The market rate of interest is below the contract rate of interest for the bond. d. The bonds can be retired at $975 each. e. The bond’s interest rate is 2½%.

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Answer to Problem 1MCQ

Explanation of Solution

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Chapter 14 Solutions