When price of bond is calculated below its par value, it is classified as

A classified bond
B discount bond
C compound bond
D consideration earning

Correct Answer: discount bond

When price of bond is calculated below its par value, it is classified as discount bond. A discount bond is a bond that is issued for less than its par or face value. Discount bonds may also be a bond currently trading for less than its face value in the secondary market. A bond is considered a deep-discount bond if it is sold at a significantly lower price than par value, usually at 20% or more.
Bissoy MCQ
#Commerce #Financial Management

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A bond whose price will rise above its face value is classified as
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B premium bond
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