If a bond has a face value of $1000 and a coupon rate of 4.25%, the bond owner will receive annual coupon payments of:
A. $4.25
B. $425.00
C. a value that cannot be determined from the information provided.
D. $42.50
Answer: D
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When a principal attempts to get an agent to reveal his or her private information, which of the following is occurring?
a. Screening b. Signalling c. Moral hazard d. Adverse selection
An example of a black market is
A. a wholesale market. B. scalping. C. barter. D. a discount market.
If the price of good X (measured on the horizontal axis of a budget line diagram) increases at the same time that the price of good Y (measured on the vertical axis) decreases, the budget line
a. will become flatter b. will become steeper c. could become either steeper or flatter, depending on the sizes of the price changes d. will rotate about its original point of intersection with the horizontal axis e. will shift outward, but not in a parallel fashion
If coal prices are rising faster than the rate of interest, then
a. investors should buy coal instead of bonds. b. investors should buy bonds instead of coal. c. coal prices should be expected to fall. d. bond prices should be expected to rise.