A Company Releases a Five-Year Bond with a Face Value

question 41

Multiple Choice

A company releases a five-year bond with a face value of $1000 and coupons paid semiannually. If market interest rates imply a YTM of 6%, what should be the coupon rate offered if the bond is to trade at par?

• A) 3%
• B) 8%
• C) 6%
• D) 4%

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Definitions:

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at preventing anticompetitive practices in their incipiency.

Tire-Repair Kits

A collection of tools and materials used for fixing punctures in vehicle tires.

Sale Conditions

Terms specified in a sales agreement that dictate the circumstances under which a sale takes place.

Clayton Act

A U.S. antitrust law aimed at preventing monopolies and promoting competition.