Asked by
Mbalie & YenkO Njilo
on Dec 16, 2024
Verified
If a bond has a face value of $10,000, a 6% coupon interest rate and a 4% market interest rate, then the semi-annual interest payment will be
A) $600.
B) $400.
C) $200.
D) $300.
Coupon Interest Rate
The annual interest rate paid on a bond, expressed as a percentage of the face value.
Market Interest Rate
The prevailing rate of interest available in the market on loans, bonds, and other financial instruments.
Semi-Annual
Occurring twice a year, typically every six months.
- Acquire insight into the notion of market interest rate and its impact on bond pricing and interest computation.
Verified Answer
CS
Learning Objectives
- Acquire insight into the notion of market interest rate and its impact on bond pricing and interest computation.