Asked by Jazzy Asberry on Jul 07, 2024
Verified
The return required by the market on the day of issuance
A)contract rate
B)effective rate
C)bond discount
D)bond premium
E)bond
F)bond indenture
G)principal
Effective Rate
A more accurate measure of interest or return that takes into account the effects of compounding over a specific period.
Contract Rate
The agreed-upon interest rate specified in a contract, often related to loans or financial agreements.
- Absorb the fundamentals of the process and accounting specifics for bond issuance, highlighting either at par or discount/premium instances.
- Understand and apply the concept of present value in the context of bond pricing and valuation.
Verified Answer
MV
Meghna VemuriJul 10, 2024
Final Answer :
b
Explanation :
The term that matches this description is the Effective rate, which is the actual return that investors will receive on a bond, taking into account any premiums or discounts.
Learning Objectives
- Absorb the fundamentals of the process and accounting specifics for bond issuance, highlighting either at par or discount/premium instances.
- Understand and apply the concept of present value in the context of bond pricing and valuation.