If a Bond Has a Face Value of $1,000 and the Bondholder

question 117

Multiple Choice

If a bond has a face value of $1,000 and the bondholder receives coupon payments of $27.50 semi-annually, the bond's coupon rate is:

• A)2.75%
• B)5.50%
• C)27.5%
• D)A value that cannot be determined from the information provided

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Definitions:

Apparent Authority

A situation where a reasonable person would understand that an agent had authority to act, even if the agent did not have actual authority.

Personal Liability

The legal obligation of an individual to bear the cost of damages or losses themselves, rather than the liability being absorbed by an entity or insurance.

Agency Relationship

A fiduciary relationship in which one party (the agent) agrees to act on behalf of another party (the principal).

Ratify

To formally approve or confirm, often used in the context of treaties, agreements, or legislation.