True or False? Last year you purchased a bond with an interest rate of 5 percent. Now the interest rate on the bond market drops to 4%. Then you will receive the same amount of coupon payments from the issuer while you are holding the bond.
1. True or False? Last year you purchased a bond with an interest rate of 5 percent. Now the interest rate on the bond market drops to 4%. Then you will receive the same amount of coupon payments from the issuer while you are holding the bond.
2. True or False? The current interest rate on a 10-year coupon bond (with face value = $1,000 and annual coupon rate = 3.25%) is 2.42%. This implies the buyer's return for holding the bond for 10 years will be 2.42%
3. A coupon bond with a face value $800 and a $40 coupon payment every year is sold for $1000. This bond has a coupon rate of _____ %
Bonds are debt instruments with long maturities with annual or semiannual interest rates to paid along life of bond.
on MATURITY face value of bond is returned to investors.
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