Question: Match each term with its definition or explanation. Terms can be used more than once. Definition/Explanation Frequency with which cash interest payments are made

Match each term with its definition or explanation. Terms can be used

Match each term with its definition or explanation. Terms can be used more than once. Definition/Explanation Frequency with which cash interest payments are made to the bondholders Nominal rate Principal Occurs when a bond issue is priced below par value Occurs when the effective interest rate is higher than the stated interest rate Par value Occurs when a bond issue is priced above par value Amount of interest that the bond issuer will pay in cash expressed as an annual rate Occurs when the effective interest rate is lower than the stated interest rate Face rate Actual return that the investors will receive Specified date when the bond issuer must pay the face value of the bonds to the bondholders Coupon rate The amount that the company will pay the bondholder at maturity Term e. Interest payment period a. Face value b. Premium c. Maturity date d. Discount e. Interest payment period f. Stated interest rate g. Market rate

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