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

question 113

Multiple Choice

A company releases a five-year bond with a face value of $1000 and coupons paid semi-annually.If market interest rates imply a YTM of 6%,what should be the coupon rate offered if the bond is to trade at par?

• A)3%
• B)4%
• C)6%
• D)8%
• E)9%

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Definitions:

Rotenone

A naturally occurring pesticide derived from the roots of certain plants, used to control insects and invasive fish species.

Insecticide

A chemical substance used to kill insects to protect crops or livestock from infestation.

Integrated Pest Management

A sustainable approach to managing pests by combining biological, cultural, mechanical, and chemical controls to minimize environmental and health risks.

Ecological Approach

A perspective or method in environmental management and research focusing on the relationships between organisms and their environments, emphasizing holistic and systemic connections.