If the Principal Amount of a Bond Is $10,000,000, the Coupon

question 116

Multiple Choice

If the principal amount of a bond is $10,000,000, the coupon rate is 7%, and the inflation rate is 4%, then the annual coupon payment made to the holder of the bond is:

• A)$70,000.
• B)$300,000.
• C)$400,000.
• D)$700,000.

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