Your friend Sara is considering investing approximately $5,000 in bonds issued by her local school district. She knows you are an accounting major and has come to you for advice. She has never invested in bonds and does not understand bond terminology. She is confused about why she will have to pay more than $5,000 face value for the bonds. She provides you with the following information:

* The bonds are available at 103

* The bonds are 8%, 20-year bonds.

* The bonds are secured.

*The bonds are “callable.”

In your initial posting discuss all of the following issues:

• What will you tell your friend to help her understand bond details provided?
• Why are the bonds selling for more than their $5,000 face value?

Answer rating: 100% (QA)

You should describe to your friend the types of bonds commonly issued Secured bonds have specific as... View the full answer