If a Corporate Bond with a Face Value of $5,000

question 231

Multiple Choice

If a corporate bond with a face value of $5,000 pays yearly coupon payments of $100, what is the coupon rate?

• A)2%
• B)5%
• C)10%
• D)20%

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Definitions:

Unfavorable Activity Variance

This term describes a situation where actual costs exceed the standards or budgeted amounts, leading to a negative variance.

Static Planning Budget

A budget based on a fixed level of activity, without adjusting for any variations in actual performance, useful for initial planning.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, revenue, or other factors influencing budgeting.

Static Budget

A financial plan that does not change or adjust over the period, regardless of any changes in business activity levels.