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    Question

    Which of the following is not true about the market

    value of a bond?
    A It is the price at which a bond is usually purchased or sold. Correct Answer Incorrect Answer
    B It may be different from face value Correct Answer Incorrect Answer
    C It can be different from the redemption value Correct Answer Incorrect Answer
    D All of the above Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    A bond's market value is the price at which you could sell the bond to another investor prior to the bond coming due.  Ideally it should reflect the present value of all the future cash flows related to the bond. This price may be different from the face value or the redemption value of the bond.

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