Assume a Semi-Annual Coupon Bond Matures in 3 Years,has a Face

question 79

Multiple Choice

Assume a semi-annual coupon bond matures in 3 years,has a face value of $1,000,a current market price of $989,and a 5 percent coupon.Which one of the following statements is correct concerning this bond?

• A) The current coupon rate is greater than 5 percent.
• B) The bond is a money market instrument.
• C) The bond will pay less annual interest now than when it was originally issued.
• D) The current yield exceeds the coupon rate.
• E) The bond will pay semi-annual payments of $50 each.

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