1.TheCOUPONRATEonacouponbondwithapurchasepriceof$2,500,a$3,000facevalue.1.TheCOUPONRATEonacouponbondwithapurchasepriceof$2,500,a$3,000facevalue,annualcouponpaymentsof$125,anda4-yearmaturityisA.thecouponpayment

Question

1.The COUPON RATE on a coupon bond with a purchase price of $2,500,a $3,000 face value.
1.The COUPON RATE on a coupon bond with a purchase price of $2,500,a $3,000 face value,annual coupon payments of $125,and a 4-year maturity is
A.the coupon payment $125 divided by the purchase price $2,500.
B.the coupon payment $125 divided by the face value $3,000.
C.the average coupon payment per year,which is $125.
D.total coupon payments $500 divided by the purchase price $2,500.
2.Which of the following $500 face-value securities with the same maturity has the lowest yield to maturity?
A.an 8% coupon bond selling for $550
B.a 10% coupon bond selling for $500
C.a 12% coupon bond selling for $480
D.a 15% coupon bond selling for $500

Answer 1

A.Coupon Rate =Coupon Payment/Par Value
A.Yield to Maturity is 6.6%
B.Yield to Maturity is 10%
C.Yield to Maturity is 12.7%
D.Yield to Maturity is 15%