Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 14 - Long-Term Liabilities - Review and Practice - Questions - Page 752: 3


a) Yield rate: interest rate actually earned by bondholders b) Nominal rate: interest rate that bond issuers promise to pay bondholders c) Stated rate: same as b) d) Market rate: same as a) and e) e) Effective rate: same as a) and d)

Work Step by Step

The nominal rate is the interest rate before inflation is taken into account. The yield rate has been adjusted for inflation.
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