Question

Bonds issued by Animite Energy are selling at a rate of 95.230. Which of the following statements is true for a bond of par value $1,000?

a.
The market value includes a premium of $5.23.
b.
The market value includes a premium of $10.50.
c.
The market value includes a discount of $47.70.
d.
The market value includes a discount of $95.23.

Answer 1

C. The market value includes a discount of $47.70

Answer 2

c.The market value includes a discount of $47.70.

Step-by-step explanation:

MArket value is the price that you would pay in the market to buy a certain bond that is worth something, so for example if the the bonds are issued at a rate of 95.230 that´s the percentage you need to pay for the bond, so right now for a $1000 bond you would pay $952.30 dollars, that means that the value of $1000 has a $47.70 disscount in the market value.