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Good Bank Inc. issues a 5 year bond with a face amount of $10,000. The bond is sold at $8,000. Assuming that the market for
Good Bank Inc. issues a 5 year bond with a face amount of $10,000. The bond is sold at $8,000. Assuming that the market for bonds is efficient, which of the following is not true?
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The present value of the differences between the cash receipts for this bond and a bond issued at PAR is $2,000
The bond was sold at a premium.
Good bank will pay out $10,000 when the bond matures.
The present value of the bond is $8,000.
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