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

question 75

Multiple Choice

A company releases a five-year bond with a face value of $1000 and coupons paid semiannually. 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) 5%
• C) 6%
• D) 7%

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Definitions:

Ostracism

The social exclusion of individuals or groups by wider society or smaller groups within it.

Ridicule

The act of mocking, deriding, or making fun of someone or something, often with the intent to belittle or demean.

Bureaucratic Inertia

The tendency of bureaucratic organizations to resist change and continue with established procedures, even in the face of new challenges or needs.

Sociological Criticism

Analyzing and critiquing social phenomena from a sociological perspective, often questioning underlying societal norms and structures.