Q641
Type of bond whose present value is lesser than that of its face value is classified as
A.
discount bond
AnswerB.
premium bond
C.
coupon bond
D.
interest bonds
Answer: Option A
Solution
Answer: Option A
Solution:
Type of bond whose present value is lesser than that of its face value is classified as discount bond. A discount bond is a bond that is issued for less than its par or face value. Discount bonds may also be a bond currently trading for less than its face value in the secondary market.