If a bond has a face value of $1,000 and a coupon rate of 4.25%, the bond owner will receive annual coupon payments of:
A) $425.00
B) $4.25
C) $42.50
D) a value that cannot be determined from the information provided.

Question

Quizplus · Accepted Answer

The annual coupon payment is calculated by multiplying the face value of the bond ($1,000) by the coupon rate (4.25%). Therefore, $1,000 * 4.25% = $42.50.

If a Bond Has a Face Value of $1,000 and a Coupon