A Person Buys a Bond with a Face Value of $10,000

question 36

Multiple Choice

A person buys a bond with a face value of $10,000 for $9,325.Each year until the maturity date the bond buyer receives a coupon payment of $650 from the issuer of the bond.The coupon rate on the bond is

• A) 9.11 percent.
• B) 6.5 percent.
• C) 7.0 percent.
• D) 6.75 percent.

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Definitions:

Revoked

Officially canceled, withdrawn, or annulled, often referring to licenses, permissions, or legal rights.

Unilateral Contract

A contract in which one party makes a promise in exchange for the other party's performance, becoming binding only upon the latter's action.

Gratuitous Promise

A one-sided agreement that the courts will not enforce.

Unilateral Contract

A contract in which one party makes a promise in exchange for the other party's performance, rather than a promise in return.