Question

25 A corporate bond has a face value of $10,000, a bond interest rate of 6% per year payable semiannually, and a maturity date of 20 years from now. If a person purchases the bond for $9000 when the interest rate in the marketplace is 8% per year, compounded semiannually. the size and frequency of the interest payments the person will receive are closest to (2.5 Points) 5400 every 6 months $270 every 6 months $360 every 6 months $300 every 6 months 26 162 Pavilion di

Answer 1

Face value of bonds = $10,000

Stated interest rate = 6% annual

Frequency of interest payment = Semi annually

Semi annual interest payment = Face value of bonds x Stated interest rate x 6/12

= 10,000 x 6% x 6/12

= $300

Fourth option is correct.

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