Bonds Payable and Investments in Bonds
Answer the following questions
1. If you bought a $1,000 7% bond for $1,050, what will the bond be worth on its maturity date?
2. If we sell a bond at a discount or premium, what happens to the discount or premium?
3. What is times interest earned?
4. What is a convertible bond? What is a callable bond? Which would you rather own? Why?
5. Why would anyone pay more than $1,000 for a bond that has a face value of $1,000?
6. If a bank loans money to a company at a fixed rate of interest in order to build a new factorcgoy, is that a bond?
