Interest Payments Determine the interest payment for the following three bonds: 5.5 percent coupon corporate bond (paid semi-annually),6.45 percent coupon Treasury note,and a corporate zero coupon bond maturing in 10 years.(Assume a $1,000 par value.)
A)$5.50, $6.45, $0, respectively
B)$27.50, $32.25, $0, respectively
C)$27.50, $32.25, $100, respectively
D)$55.00, $64.50, $0, respectively

Question

Quizplus · Accepted Answer

- For the 5.5 percent coupon corporate bond, the semi-annual coupon payment would be: (5.5% * $1,000) / 2 = $27.50
- For the 6.45 percent coupon Treasury note, the semi-annual coupon payment would be: (6.45% * $1,000) / 2 = $32.25
- For the corporate zero coupon bond, there are no periodic coupon payments, so the interest payment would be $0.
Therefore, the correct choice is B, with the semi-annual interest payments of $27.50, $32.25, and $0 for the three bonds, respectively.

Interest Payments Determine the Interest Payment for the Following Three