1. A $1,000 bond that is sold for $1,050 on its issuance date has been sold at

A. a discount (at par).

B. a premium.

C. its face value (at par).

D. none of the above.

2. A $1,000 bond that is sold for $1,000 on its issuance date has been sold at

A. a discount.

B. a premium.

C. its face value (at par).

D. none of the above.

3. The amount of cash received from the issuance of a bond will be less than the face amount of the bond when the bond has been sold at

A. a discount.

B. a premium

.C. its face value (at par)

.D. none of the above. OVER

4. If the market rate of interest is 4%, a bond that pays 5% interest (i.e., the coupon rate) per year would be sold at

A. a premium in order to yield the 4% market rate of interest.

B. a premium in order to yield the 5% coupon rate of interest

.C. a discount in order to yield the 4% market rate of interest

.D. a discount in order to yield the 5% coupon rate of interest.

5. The selling price of a bond is measured as the

A. present value of the actual future cash flows for the principal and interest payments based on the market rate of interest, discounted at the coupon rate of interest.

B. present value of the actual future cash flows for the principal and interest payments based on the coupon rate of interest, discounted at the market rate of interest