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Please help me decide True or False for the following statements regarding rates of interest associated with bonds. If the market interest rate is
Please help me decide True or False for the following statements regarding rates of interest associated with bonds.
- If the market interest rate is higher than the contractual interest rate, the bonds will be issued at a discount.
2. If the market interest rate equals the contractual interest rate, the bonds will be issued at face value.
3. If the market interest rate is lower than the contractual interest rate, the bonds will be issued at a discount.
4. The market interest rate will be paid to bondholders in cash each interest period.
5. A discount or premium on a bond causes the bond to yield the market interest rate over the life of the bond.
6. When differences exist between the market interest rate and the contractual interest rate, businesses typically reprint the bonds to reflect the market interest rate.
