A $20,000 mortgage bond that is due in 1 year pays interest of $500 every 3 months The bonds coupon rate is (a) 2 5 per year, payable quarterly (b) 5 per year, payable quarterly (c) 5 per year, payable semiannually (d) 10 per year, payable quarterly ...

The value of the bond20000 Quarterly interest rece ...

A $20,000 mortgage bond that is due in 1 year pays interest of $500 every 3 months.

Question:

A $20,000 mortgage bond that is due in 1 year pays interest of $500 every 3 months. The bond’s rate is:
(a) 2.5% per year, payable quarterly
(b) 5% per year, payable quarterly
(c) 5% per year, payable semiannually
(d) 10% per year, payable quarterly

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...