Read each statement below, indicate if it is true or false, and give a brief explanation of your answer 2. When a bond is sold at a discount, the maturity value is less than the present value of the principal and interest payments, based on the market rate of interest on the date of issue A. the maturity value is less than the present value of the principal and interest payments, based on the contract (stated) rate B. the market rate of interest is higher than the contract (stated) rate C. the maturity value is greater than the present value of future cash flows, which is why the bond was issued at a discount D. the market rate of interest is lower than the contract (stated) rate 3 When a bond is issued at a discount, the semiannual cash interest payments are calculated using the market interest rate on the date of issue A. the contract (stated) rate, not the market rate, is always used to calculate the cash interest payment B. the contract (stated) rate is used to calculate the present value of the future cash flows from the bond C. the market rate is only used to calculate cash interest payment when a bond is issued at a premium D. because the bond is issued at a discount 4. When a bond is sold at a discount, the cash received is less than the present value of the future cash flows from the bond, which are based on the market rate of interest on the date of isswe. A. because the market rate of interest is used when calculating the present value of the future cash flows B. the cash received is more than the present value of the future cash flows C. the discount amount equals to the difference between the cash received and the present value of the future cash flows D. the cash received is equal to the present value of the future cash flows discounted at the market rate of interest on the date of issue