CFA Practice Question

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CFA Practice Question

The price paid by investors for bonds payable is determined by ______.

A. market conditions
B. bond issuers
C. underwriters
Correct Answer: A

Bonds are priced so that the true rate of interest is equal to the market rate at the time of the bond sale.

User Contributed Comments 4

User Comment
kalps Bond price = true rate of interest on bond is same as market at the time of the bond sale
guna Depends whether it is selling at a discount or premium
magicchip In actuality creditworthiness of the issuer is a big factor. There is a risk premium out there, so the question would have bben correct IF it would have said something like "all else equal"
javasun unless specified otherwise you should always assume "all else equal".
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