Semiannual Payment Bonds with the Same Risk (Aaa) and Maturity

question 48

Multiple Choice

Semiannual payment bonds with the same risk (Aaa) and maturity (20 years) as your company's bonds have a simp yield of 9 percent.Your company's treasurer is thinking of issuing at par some $1,000 par value, 20-year, quarterly p bonds.She has asked you to determine what quarterly interest payment, in dollars, the company would have to set i provide the same effective annual rate (EAR) as those on the 20-year, semiannual payment bonds.What would the interest payment be, in dollars?

• A)$45.00
• B)$25.00
• C)$22.25
• D)$27.50
• E)$23.00

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