A Corporate Bond Makes Payments of $9

question 114

Multiple Choice

A corporate bond makes payments of $9.67 every month for ten years with a final payment of $2009.67.Which of the following best describes this bond?

• A)a 10-year bond with a face value of $2000 and a coupon rate of 4.8% with monthly payments
• B)a 10-year bond with a face value of $2000 and a coupon rate of 5.8% with monthly payments
• C)a 10-year bond with a face value of $2009.67 and a coupon rate of 4.8% with monthly payments
• D)a 10-year bond with a face value of $2009.67 and a coupon rate of 5.8% with monthly payments
• E)a 10-year bond with a face value of $2009.67 and a coupon rate of 6.8% with monthly payments

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Definitions:

Colluding

Coordinating actions or decisions secretly, especially between competitors in order to cheat or deceive others.

Industry

A category of business activity that produces goods or provides services, categorized by their focus and processes.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good affects the overall cost of production.

Joint Monthly Profit

The combined profit earned by two or more partners or businesses in a single month.