Use the following information to answer the question(s)below.
-A default-free security has an annual coupon rate of 3.25% and sells for par.This bond will mature in:
A)1 year.
B)2 years.
C)3 years.
D)4 years.

Question

Use the following information to answer the question(s)below. 
-A default-free security has an annual coupon rate of 3.25% and sells for par.This bond will mature in:
A)1 year. 
B)2 years. 
C)3 years. 
D)4 years.

Quizplus · Accepted Answer

The bond sells for par, which means that its price is equal to its face value. The annual coupon rate is 3.25%, which means that the bond pays $32.50 in interest each year. The bond will mature in 1 year, which means that the investor will receive the face value of the bond ($1,000) at the end of the year.

Use the Following Information to Answer the Question(s)below