A corporate bond makes payments of $9.67 every month for ten years with a final payment of $2009.67.Which of the following best describes this bond?
A)a 10-year bond with a face value of $2000 and a coupon rate of 4.8% with monthly payments
B)a 10-year bond with a face value of $2000 and a coupon rate of 5.8% with monthly payments
C)a 10-year bond with a face value of $2009.67 and a coupon rate of 4.8% with monthly payments
D)a 10-year bond with a face value of $2009.67 and a coupon rate of 5.8% with monthly payments
E)a 10-year bond with a face value of $2009.67 and a coupon rate of 6.8% with monthly payments

Question

Quizplus · Accepted Answer

The bond pays $9.67 monthly, which is $116.04 annually. A $2000 face value bond with a 5.8% coupon rate would pay $116 annually, closely matching the given payments.

A Corporate Bond Makes Payments of $9