How Much Will the Coupon Payments Be of a 30-Year

question 65

Multiple Choice

How much will the coupon payments be of a 30-year $10,000 bond with a 4.5% coupon rate and semiannual payments?

• A)$30
• B)$225
• C)$350
• D)$450

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Definitions:

Tax Credits

Amounts subtracted directly from the taxes owed to the government, incentivizing certain economic activities or investments.

Transfer Payments

Non-compulsory payments made by the government to individuals or other entities, without a direct exchange of services or goods; examples include pensions and subsidies.

Government Securities

Financial instruments issued by the government to borrow money from investors, typically with a promise to pay back with interest.

Deficit Finance

The practice of funding government spending by borrowing rather than from taxation, leading to budget deficits.