If the principal amount of a bond is $2,000,000, the coupon rate is 6 percent , and the inflation rate is 4 percent, then the annual coupon payment made to the holder of the bond is:
A. $80,000.
B. $40,000.
C. $120,000.
D. $12,000.
Answer: C
You might also like to view...
Which of the following statements is true?
A) The marginal cost curve intersects the average fixed cost curve at its minimum point. B) When marginal cost is greater than average fixed cost, average fixed cost increases. C) Average fixed cost does not change as output increases. D) As output increases, average fixed cost becomes smaller and smaller.
To combat inflation, Congress and the president should
A) increase transfer payments. B) decrease taxes. C) decrease government spending. D) raise interest rates.
A real option can present management with the opportunity to
A) vary output. B) abandon a project. C) postpone a project. D) All of the above
As price increases along a downsloping linear demand curve:
A. price elasticity of demand decreases. B. price elasticity of demand increases. C. price elasticity of demand does not change. D. the behavior of price elasticity of demand cannot be determined.