Question: Read each statement below indicate if it true or false, and give a brief explanation of your answer. 1. When a bond is sold at

Read each statement below indicate if it true or false, and give a brief explanation of your answer.

1. When a bond is sold at a discount, the cash received is less than the present value of the future cash flows from the bond, based on the market rate of interest on the date of issue.

A the discount amount equals to the difference between the cash received and the present value of the future cash flows.

B. the cash received is more than the present value of the future cash flows.

C. the cash received is equal to the present value of the future cash flows.

D. because the market rate of interest is used when calculating the present value of the future cash flows.

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