Final answer:
In financial terms, a bond has several parts and its value is also referred to as its par value. Bonds that trade at a price less than their par value are called discount, and those that trade at a price greater than their par value are called premium. Therefore, the correct answer is: a. face; premium; discount.
Step-by-step explanation:
In financial terms, a bond has several parts. A bond is basically an "I owe you" note that an investor receives in exchange for capital (money). The bond has a face value. This is the amount the borrower agrees to pay the investor at maturity. The bond has a coupon rate or interest rate, which is usually semi-annual, but can be paid at different times throughout the year.
The bond has a maturity date when the borrower will pay back its face value as well as its last interest payment. Combining the bond's face value, interest rate, and maturity date, and market interest rates, allows a buyer to compute a bond's present value, which is the most that a buyer would be willing to pay for a given bond. This may or may not be the same as the face value.
A bond's value is also called its par value. Bonds that trade at a price less than their par value are said to sell at a discount, whereas those that trade at a price greater than their par value sell at a premium.
Therefore, the correct answer is: a. face; premium; discount.