Question

State whether each of the following statements is true or false.

1. Mortgage bonds and sinking fund bonds are both examples of debenture bonds.
True or False

2. Convertible bonds are also known as callable bonds.
True or False

3. The market rate is the rate investors demand for loaning funds.
True or False

4. Annual interest on bonds is equal to the face value times the stated rate.
True or False

5. The present value of a bond is the value at which it should sell in the market.
True or False

Answer 1

Answer:

Answer for Question 1 is False

Answer for Question 2 is False

Answer for Question 3 is True

Answer for Question 4 is True

Answer for Question 5 is True

Explanation:

1. Debenture bonds include unsecured bonds but do not include mortgage bonds and sinking bonds.

2. Callable bonds are bonds issued by the issuer before the maturity period.

3. True about market rate.

4. True about Annual interest.

5. True about the Present value of a bond.