An investor with a bond of par value $1,000 paying 5% coupon semi-annually will receive ________. a. $100 annually b. $25 semi-annually c. $25 annually d. None of the above.
An investor with a bond of par value $1,000 paying 5% coupon semi-annually will receive ________. a. $100 annually b. $25 semi-annually c. $25 annually d. None of the above.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
An investor with a bond of par value $1,000 paying 5% coupon semi-annually will receive ________.
a. $100 annually
b. $25 semi-annually
c. $25 annually
d. None of the above.
Expert Solution
Step 1
The bond is a debt instrument in which a company receives a loan in the form of the bond price which is repaid in form of coupons and face value. Bonds are tradeable on the secondary market.
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