The type of bond whose present value is lesser than that of its face value is classified as ___________?
Correct answer: A. discount bond
- A. discount bond
- B. premium bond
- C. coupon bond
- D. interest bondsCredit Cards
Explanation
A discount bond sells for less than its face value, usually because its coupon rate is below the market yield. A premium bond has a market value above face value.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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