An investor invested in a 10-year bond that makes a $50 coupon payment at the end of every six-month period until the bond matures. These coupon payments received by the investor can be referred to as a(an) _____.

Question

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A bond that makes equal and regular payments at fixed intervals is called an ordinary annuity. In this case, the bond pays a coupon payment of $50 every six months until it matures in 10 years. Therefore, the coupon payments received by the investor are an example of an ordinary annuity.

An Investor Invested in a 10-Year Bond That Makes a $50