Response to the following questions:
1. What future cash inflows is a company buying when it purchases a held-to-maturity security?
2. When would a company be willing to pay more than the face amount (a premium) for a held-tomaturity security?
3. Why does the amortization of a discount increase the amount of interest revenue earned on a held-to-maturity security?
If possible, please give examples to better understand your answers.