Reference no: EM133021675

Questions -

Q1. Consider a five-year zero-coupon bond which has face value of $500,000 and a yield of 5% compounded semi-annually. The purchase price is:

A) $375,604.

B) $390,599.

C) $398,221.

D) $354,459.

Q2. A 10-year coupon bond with face value of $500,000 and a semi-annual coupon rate of 6% p.a. pays how much per half year in coupon payments?

A) $30,000.

B) $15,000.

C) $1500.

D) $60,000.

Q3. What is the 'coupon rate' of a bond with face value $100,000 and cash payments per half year of $2000?

A) 2%.

B) 20%.

C) 4%.

D) We cannot answer without knowing the maturity of the bond.