What is the annual coupon payment for bond

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Reference no: EM131909356

1. How much is the par value for a 5-year maturity bond that has a price of $1,000 now and an annual coupon rate of 9% if the interest rate is 9%?

$700

$1,050

$1,000

$1,100

None of the above

2. What is the annual coupon payment for a bond (par value of $1,000) with 7 years until maturity, a price of $1,000, and a discount rate of 6%?

$80

$70

$60

$50

None of the above

3. What happens to the price of a three-year bond with an 8% coupon when interest rates change from 6% to 8%?

A price increase of $53.47

A price decrease of $51.54

A price decrease of $53.47

No change in price

None of the above

4. What is the rate of return for an investor who pays $1,000 for a three-year bond with a 7% coupon rate and sells the bond one year later for $1,000?

none of the above

Reference no: EM131909356

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