Question

What is the semiannual income from six $1,000, 5.5% bonds?

a) $275
b) $300
c) $330
d) $385

Answer 1

The semiannual income from six $1,000, 5.5% bonds is $165.

Step-by-step explanation:

The formula to calculate the semiannual income from bonds is:

Semiannual Income = Face Value x Coupon Rate / 2

In this case, each bond has a face value of $1,000 and a coupon rate of 5.5%. Therefore, the semiannual income for each bond is:

Semiannual Income = $1,000 x 5.5% / 2 = $27.50

To find the semiannual income from six bonds, we multiply the semiannual income of one bond by six:

Semiannual Income = $27.50 x 6 = $165

So, the semiannual income from six $1,000, 5.5% bonds is $165.