Question

Question 8 (4 points)

Stephen bought a bond with a face value of $8000 and a coupon rate of 6.75%. The
bond will mature in 15 years.
How much interest will he receive semiannually?
$270
$324
O $360
O $540

Answer 1

Answer: 270

Explanation:

Answer 2

$270

Explanation:

-The coupon amount is calculated as:

`Coupon=Coupon\ Rate * Face \ Value`

-Given the face value is $8,000 and coupon rate is 6.75%, the semi-annual coupon amount is calculated as:

`Coupon=Coupon\ Rate * Face \ Value\\\\=0.0675* 8000* (1)/(2)\\\\=270`

Hence, the semi-annual coupon amount is $270