What information is needed in order to determine the selling

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Problem 1: Which of the following terms does not describe the interest rate printed on the bond certificate?

a. Stated rate
b. Face rate
c. Coupon rate
d. Effective rate

Problem 2: Fox Chapel Company wishes to issue $400,000 of five-year, 6% bonds, with interest paid annually at the end of the year. The market rate of interest is currently 5%. What information is needed in order to determine the selling price?

a. The life of the bonds, the market rate of interest, the bond rating, and the face amount of the bonds.
b. The face amount of the bonds, the stated rate of interest, the market rate of interest, and the bond rating.
c. The face amount of the bonds, the market rate of interest, the purpose of the issue, and the bond life.
d. The face amount of the bonds, the stated rate of interest, the market rate of interest, and the bond life.

Reference no: EM132826420

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