Sunshine Mining Bonds have a $1,000 face value,pay $95 annual interest,and are currently quoted at $1,302.50.The coupon rate of interest is

Question

Quizplus · Accepted Answer

The coupon rate of interest is the annual interest payment divided by the face value of the bond and expressed as a percentage.

Coupon rate = (Annual interest payment / Face value) x 100%

Plugging in the given values, we get:

Coupon rate = ($95 / $1,000) x 100%
Coupon rate = 9.5%

Therefore, the correct answer is choice (B) 9.5%.

Sunshine Mining Bonds Have a $1,000 Face Value,pay $95 Annual