1. The market price of a bond issued at a discount is the present value of its principal amount at the market (effective) rate of interest a. Less the present value of all future interest payments at the market (effective) rate of interest. b. Less the present value of all future interest payments at the rate of interest stated on the bond. c. Plus the present value of all future interest payments at the market (effective) rate of interest. d. Plus the present value of all future interest payments at the rate of interest stated on the bond. 2. The following information pertains to Camp Corp.'s issuance of bonds on July 1, 1998: Face amount $800,000 Terms Stated interest rate 6% Interest payment dates Annually on July 1 Yield 9% 10 years At 6% At 9% 0.558 0.422 1.791 2.367 Present value of 1 for 10 periods Future value of 1 for 10 periods Present value of ordinary annuity of 1 for 10 periods 7.360 6.418 What should be the issue price for each $1,000 bond? a. $1,000 b. $864 c. $807 d. $700 3. The issue price of a bond is equal to the present value of the future cash flows for interest and principal when the bond is issued a. b. c. d. At par Yes Yes No Yes At a discount No No Yes Yes At a premium Yes No Yes Yes