A Bond with a 7% Coupon That Pays Interest Semi-Annually

question 26

Multiple Choice

A bond with a 7% coupon that pays interest semi-annually and is priced at par will have a market price of _____ and interest payments in the amount of _____ each.

• A) $1,007; $70
• B) $1,070; $35
• C) $1,070; $70
• D) $1,000; $35

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Definitions:

Occurrence

An event or incident that takes place, often used in legal and insurance contexts to specify an event covered by a policy or agreement.

Nonoccurrence

The failure or absence of an event or condition that was anticipated or required.

Event

A specific occurrence or happening, often of significance, that takes place at a particular time.

Agreement

A mutual understanding or arrangement between two or more parties outlining terms and conditions for a specific purpose.