If a Corporate Bond with Face Value of $8,000 Has

question 25

Multiple Choice

If a corporate bond with face value of $8,000 has an interest rate of 4 percent paid once a year for a term of 30 years,what is the size of the coupon payment?

• A)$320
• B)$2,000
• C)$8,000
• D)$9,600

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Definitions:

Fraction Form

Fraction form is a way to represent numbers by showing how many parts of a whole are there, typically written with one number over another, separated by a line.

Proportion

A relationship between two quantities denoting their ratio.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Punch Recipe

A set of instructions for making a large, usually sweet and fruity drink intended to serve multiple people.