If coupon rate is more than current rate of interest then bond will be sold
A. More than its par value
B. Seasoned par value
C. At par value
D. Below its par value
Answer: Option A
Solution(By Examveda Team)
A bond's interest rate is related to the current prevailing interest rates and the perceived risk of the issuer. When interest rates are less than the coupon rate, the bond can be sold at a premium (higher than the face value). When current interest rates are greater than a bond's coupon rate, the bond will sell below its face value at a discount.This Question Belongs to Commerce >> Financial Management
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Investment is the _______________.
A. net additions made to the nation’s capital stocks
B. person’s commitment to buy a flat or house
C. employment of funds on assets to earn returns
D. employment of funds on goods and services that are used in production process
Financial Management is mainly concerned with ______________.
A. All aspects of acquiring and utilizing financial resources for firms activities
B. Arrangement of funds
C. Efficient Management of every business
D. Profit maximization
The primary goal of the financial management is ____________.
A. to maximize the return
B. to minimize the risk
C. to maximize the wealth of owners
D. to maximize profit
In his traditional role the finance manager is responsible for ___________.
A. proper utilisation of funds
B. arrangement of financial resources
C. acquiring capital assets of the organization
D. efficient management of capital
A is right answer.
Explanation:
When current interest rates are greater than a bond's coupon rate, the bond will sell below its face value at a discount. When interest rates are less than the coupon rate, the bond can be sold at a premium--higher than the face value.