The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-A bond with a par value of $1,000 is traded at $1,500. The coupon rate offered on the bond is 10 percent.The bond matures after a period of 5 years . The coupon paid to the bond holder after the end of the first year is:

Question

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2
 
-A bond with a par value of $1,000 is traded at $1,500. The coupon rate offered on the bond is 10 percent.The bond matures after a period of 5 years . The coupon paid to the bond holder after the end of the first year is:

Quizplus · Accepted Answer

Coupon rate = 10%
Par value of the bond = $1,000
Coupon payment = Coupon rate * Par value of the bond = 10% * $1,000 = $100
The bond matures after 5 years, but the coupon payment is only for the first year. So, the coupon paid to the bond holder after the end of the first year is $100.

The Figure Given Below Shows the Demand [D and D']