. Finance theory suggests that the market value of a bond is based… . Finance theory suggests that the market value of a bond is based upon_______.a. the future value of interest paid on a bondb. the sum total of principal and interest paid on a bondc. the sum of the present value of the bond’s interest payments and the present value of the par valued. the future value of a bond’s par value plus the future value of the interest payments2. Shafer Corporation issued callable bonds. The bonds are most likely to be called if_____.a. Interest rates decreaseb. interest rates increasec. Shafer Corporation needs additional financingd. Shafer Corporation’s stock price increases dramatically3. Which of the following statements concerning bonds and risk is most accurate?a. A rational investor will always prefer AAA-rated bonds to junk bonds.b. AAA-rated bonds yield high returns because of very little risk.c. AAA-rated bonds may also be called high-yielding securities.d. Junk bonds yield high returns because these bonds are very risky. Business Finance FIN 222
