Nick Bosch has prepared the following list of statements about bonds. 1. Bonds are a form of

Question:

Nick Bosch has prepared the following list of statements about bonds.

1. Bonds are a form of interest-bearing notes payable.

2. Secured bonds have specific assets of the issuer pledged as collateral for the bonds.

3. Secured bonds are also known as debenture bonds.

4. A conversion feature may be added to bonds to make them more attractive to bond buyers.

5. The rate used to determine the amount of cash interest the borrower pays is called the stated rate.

6. Bond prices are usually quoted as a percentage of the face value of the bond.

7. The present value of a bond is the value at which it should sell in the marketplace.

Instructions

Identify each statement as true or false. If false, indicate how to correct the statement.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...