Question

Consider a 10-year bond with a face value of $1000 that has a coupon rate of 5.5%, with semiannual payments. a. What is the coupon payment for this bond

Answer 1

Coupon= $27.5

Step-by-step explanation:

Giving the following information:

Face value= $1,000

Coupon= semiannual payments

Coupon rate= 0.055/2= 0.0275

To calculate the semiannual payment, we need to use the following formula:

Coupon= face value*coupon rate

Coupon= 1,000*0.0275

Coupon= $27.5