1. A zero- coupon bond or a discount bond

a. Is sold at a price below its face value.

b. Is sold at a price above its face value.

c. Is sold at a price equal to its face value.

d. Gives the bondholder interest payment plus its face value at maturity.

2. The par value of the bond

a. Changes with the price of the bond.

b. Varies with the prevailing interest rate in the market.

c. Does not change with the price of the bond.

d. Is always the same as the purchase price of the bond.

3. The par value or the face value of a bond

a. Is always the price of the bond when it is purchased.

b. Is the interest earned on the bond.

c. Is the yield on the bond.

d. Is the amount of money the buyer (investor) of the bond receives at the

maturity date.

CHOOSE A ANSWER FOR EACH QUESTION