What Happens to the Coupon Rate of a $1,000 Face

question 39

Multiple Choice

What happens to the coupon rate of a $1,000 face value bond that pays $80 annually in interest if market interest rates change from 9% to 10%?

• A)the coupon rate increases to 10%.
• B)the coupon rate remains at 9%.
• C)the coupon rate remains at 8%.
• D)the coupon rate decreases to 8%.

---

Definitions:

High-powered Objective

An objective lens used in microscopy with high magnification capabilities, allowing for the detailed observation of minute specimens.

Micrometers

Units of length in the metric system equal to one millionth of a meter, commonly used in science and engineering for precise measurements.

μm

Micrometer, a unit of length in the metric system equal to one millionth of a meter, used to measure small distances, such as those in biological cells and structures.

Total Magnification

The combined magnifying power of an optical system, calculated by multiplying the objective lens magnification by the ocular lens magnification.