A Company Issues 8% Bonds with a Par Value of $40,000

question 72

Multiple Choice

A company issues 8% bonds with a par value of $40,000 at par on January 1.The market rate on the date of issuance was 7%.The bonds pay interest semiannually on January 1 and July 1.The cash paid on July 1 to the bond holder(s) is:

• A)$3,200.
• B)$2,800.
• C)$1,600.
• D)$1,400.
• E)$0.

---

Definitions:

Stem-And-Leaf Display

A graphical method of displaying quantitative data to show its distribution, using digits to represent the stems and leaves.

Annual Precipitation

The total measure of rainfall and other forms of precipitation, such as snow, that fall in a given area over the course of a year.

Millimetres

A unit of length in the metric system equal to one thousandth of a metre.

Outliers

Observations in data that are significantly distant from the majority of other data points, often indicating a measurement error or a novel phenomenon.