If a Corporate Bond with Face Value of $1,000 Has

question 238

Multiple Choice

If a corporate bond with face value of $1,000 has an interest rate of eight percent paid once a year for a term of 30 years,what is the size of the coupon payment?

• A)$1,000
• B)$300
• C)$80
• D)$8

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Definitions:

Financial Risk

Financial risk encompasses the possible loss of financial assets, liabilities, or financial failure due to variables like currency fluctuations, interest rate changes, and funding challenges.

Capital Structure

The mix of debt and equity maintained by a firm.

Exchange Rate Risk

The risk related to having international operations in a world where relative currency values vary.

September Futures Contract

A futures contract with an expiration date in September where assets can be commodities or financial instruments, stipulating sale or purchase terms for future delivery.