The price of a bond is equal to:

Question

Quizplus · Accepted Answer

The price of a bond is determined by discounting the sum of the present value of the face amount and the present value of the stated interest payments. This is because the face amount is the future value of the bond, and the interest payments are a series of fixed future cash flows that need to be discounted to their present value. Option A and D are incorrect because they both refer to future values, which are not relevant when determining the price of a bond. Option B is incorrect because it only refers to the interest payments and not the face amount.

The Price of a Bond Is Equal To