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31 the stated interest rate is always declared as a n a monthly rate b daily rate c 4297874


31) The stated interest rate is always declared as a(n):

A) monthly rate.

B) daily rate.

C) semiannual rate.

D) annual rate.

32) The organization that purchases the bonds from an issuing corporation and resells them to its clients or sells the bonds for a commission is the:

A) underwriter.

B) bank.

C) stockholders.

D) bondholders.

33) Bonds in a particular issue which mature in installments over a period of time are called:

A) convertible bonds.

B) term bonds.

C) callable bonds.

D) serial bonds.

34) Bonds which are backed only by the good faith of the borrower are referred to as:

A) junk bonds.

B) unregistered bonds.

C) debenture bonds.

D) callable bonds.

35) If the market interest rate is greater than the stated interest rate, bonds will sell:

A) at face value.

B) at a discount.

C) at a premium.

D) at market value.

36) If bonds are issued at a discount, it means that the:

A) market interest rate is higher than the stated interest rate.

B) market interest rate is lower than the stated interest rate.

C) financial strength of the issuer is weak.

D) bond is convertible.

37) The market interest rate is also referred to as the:

A) contractual rate.

B) coupon rate.

C) effective rate.

D) stated rate.

38) The carrying amount of bonds issued at a discount is calculated by:

A) subtracting Discount on Bonds Payable from Bonds Payable.

B) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable.

C) subtracting Interest Payable from Bonds Payable.

D) subtracting Interest Expense from Bonds Payable.

39) The carrying amount of bonds will equal the market price:

A) at the end of the fiscal period.

B) at the close of every business day.

C) on the date the bond is issued.

D) only when the bonds are converted to common stock.

40) On the bond's maturity date, its face value will equal the:

A) maturity value plus all interest payments.

B) maturity value less all interest payments.

C) present value of the bonds on its issuance date.

D) maturity value.



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