Question: Answer the following multiple choice question. Choose the correct answer only. No explanation is required. Each question 1 mark If market interest rate is higher

Answer the following multiple choice question. Choose the correct answer only. No explanation is required. Each question 1 mark

  1. If market interest rate is higher than the coupon rate then the bond is sold at ----------, and if the coupon rate is higher than market rate, then the bond is sold at ----------
  1. Premium; Discount
  2. Discount; Premium
  3. Primary market; secondary market
  4. Money Market; Capital market
  1. Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds?
  1. A reduction in market interest rates
  2. The companys bonds are downgraded
  3. An increase in the call premium
  4. all of these
  1. Which of the following is an expansionary monetary policy?
  1. Open market sales
  2. Increasing discount rate ( Bank rate)
  3. lowering reserve requirement
  4. Increasing excise duty

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