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Question
Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a current market price of $989, and a 5 percent coupon. Which one of the following statements is correct concerning this bond?A. The current coupon rate is greater than 5 percent.
B. The bond is a money market instrument.
C. The bond will pay less annual interest now than when it was originally issued.
D. The current yield exceeds the coupon rate.
E. The bond will pay semi-annual payments of $50 each.
Answer
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