Which the investor interest income for the year would be

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Problem 1: Ana purchased a bond as a long-term investment on January 1. Annual interest was received on December 31. The investor's interest income for the year would be lowest if the bond was purchased at:

Option 1: a discount.

Option 2: a premium.

Option 3: par.

Option 4: face value.

Problem 2: If the bonds are acquired between interest payment dates, the price paid for the bond would be:

Option 1: equal to the acquisition cost.

Option 2: increased by a charge for accrued interest to the date of purchase.

Option 3: decreased by a credit for accrued interest to the date of purchase.

Option 4: equal to the par value increased by a charge for accrued interest to the date of purchase.

Reference no: EM133010315

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