THE ANSWER IS NOT $6\mathrm{.}90\%$ Review the Bond Table below; all bonds have semi$-$annual payments.

Security Coupon Rate Face Value Price

$1-$yr Treasury $0\mathrm{.}00\%$ $$1,000$ $ $965\mathrm{.}90$

$5-$yr Treasury $4\mathrm{.}50\%$ $$1,000$ $ $991\mathrm{.}18$

$10-$yr Treasury $5\mathrm{.}00\%$ $$1,000$ $ $976\mathrm{.}94$

$5-$yr Corporate $4\mathrm{.}80\%$ $$1,000$ $ $912\mathrm{.}46$

$($rated A$)$

$10-$year Corporate $8\mathrm{.}40\%$ $$1,000$ $$1,044\mathrm{.}66$

$($rated BBB$)$

If a company wanted to issue a new Corporate Bond $(10$ years, A rating$)$ for full price, what coupon rate would it have to offer?

Multiple Choice

$6\mathrm{.}90\%$

$6\mathrm{.}50\%$

$7\mathrm{.}75\%$

$7\mathrm{.}50\%$

None of the aboveReview the Bond Table below; all bonds have semi$-$annual payments.

Security.

Coupon Rate

Face Value

Price

$1-$yr Treasury

$5-$yr Treasury

$10-$yr Treasury

$5-$yr Corporate

$($rated A$)$

$10-$year Corporate $8\mathrm{.}40\%,$$$1,000,$$$1,044\mathrm{.}66$

$($rated BBB$)$

If a company wanted to issue a new Corporate Bond $(10$ years, A rating$)$ for full price, what coupon rate would it have to offer?

Multiple Choice

$6\mathrm{.}90\%$

$6\mathrm{.}50\%$

$7\mathrm{.}75\%$

$7\mathrm{.}50\%$

None of the above