Which of the following best shows the timeline for cash flows from a five-year bond with a face value of $2,000, a coupon rate of 5.0%, and semiannual payments?
A) 0 1 2 3 4 5
+---------+---------+---------+---------+---------+
$100 $100 $100 $100 $2100
B) 0 1 2 3 9 10
+---------+---------+---------+----- . . . -------+---------+
$25 $25 $25 $25 $25
C) 0 1 2 3 9 10
+---------+---------+---------+----- . . . -------+---------+
$50 $50 $50 $50 $50
D) 0 1 2 3 9 10
+---------+---------+---------+----- . . . -------+---------+
$50 $50 $50 $50 $2050
Correct Answer:
Verified
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