A Company Releases a Five-Year Bond with a Face Value

question 63

Multiple Choice

A company releases a five-year bond with a face value of $1000 and coupons paid semiannually.If market interest rates imply a YTM of 6%,which of the following coupon rates will cause the bond to be issued at a premium?

• A)3%
• B)4%
• C)6%
• D)8%

---

Definitions:

Diet Low

A diet lacking in sufficient nutrients, calories, or specific food types necessary for healthy bodily function.

Menstrual Period

A natural, recurring biological process in female bodies that involves the shedding of the uterine lining, typically lasting a few days to a week.

Menopause

The transition period in a woman's life marking the end of her reproductive years, characterized by the cessation of menstruation.

Osteoporosis

A bone disease characterized by decreased density and strength of the bones, leading to an increased risk of fractures.