Question

Company Name Maturity Stated Interest Market Interest Bond Price Sea the World Cruises 2026 1.85 2.70 93.14 Lilly 2020 6.00 4.00 107.26 McDonald's 2045 4.88 4.10 112.89 Which of the following statements is true about Sea the World Cruises' $1,000 bond price? Multiple choice question. They sold for $9,314 each. They sold for $93.14 each. They sold for $931.40 each.

Answer 1

Sea the World Cruises' $1,000 bond sold for $931.40 each, which is 93.14% of its full face value.

Step-by-step explanation:

The statement that is true about Sea the World Cruises' $1,000 bond price is that they sold for $931.40 each. When bond prices are quoted, they are typically listed as a percentage of the bond's face value, which is usually $1,000. Therefore, a bond price of 93.14 means that the bond is selling for 93.14% of its face value. In this case, 93.14% of $1,000 is $931.40.