Use the following bond quotes to answer this question:
$\begin{array}{lrr}
\text { Issuer Name}& \text {Coupon }&\text {Maturity}&\text { High }&\text {Low } &\text { Last}&\text { Change }\
\text { Alpha } &5.875& \text {Apr 2010 }&99.823&98.667&99.402&+.008\
\text { Industrial } &\
\text { Beta Movers } &7.120& \text {May 2036}&103.407&100.013&103.354&+.010 \
\end{array}$

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The Alpha Industrial bonds pay an annual interest payment equal to 5.875 percent of:
A)$999.90.
B)$1,000.00.
C)$1,000.13.
D)$1,033.54.
E)$1,034.07.

Question

Use the following bond quotes to answer this question:
$\begin{array}{lrr}
\text { Issuer Name}& \text {Coupon }&\text {Maturity}&\text { High }&\text {Low } &\text { Last}&\text { Change }\
  \text { Alpha } &5.875& \text {Apr 2010 }&99.823&98.667&99.402&+.008\
 \text { Industrial  } &\
 \text { Beta Movers  } &7.120& \text {May 2036}&103.407&100.013&103.354&+.010 \
\end{array}$

-
The Alpha Industrial bonds pay an annual interest payment equal to 5.875 percent of:
A)$999.90.
B)$1,000.00.
C)$1,000.13.
D)$1,033.54.
E)$1,034.07.

Quizplus · Accepted Answer

The coupon rate of a bond is applied to its par value to determine the annual interest payment. Bonds are typically issued with a par value of $1,000, which is the standard amount upon which the coupon rate is applied, regardless of the bond's current market price.

Use the Following Bond Quotes to Answer This Question - the Alpha Industrial Bonds Pay an Annual Interest Payment

Use the Following Bond Quotes to Answer This Question -
the Alpha Industrial Bonds Pay an Annual Interest Payment