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What is the price paid to the bondholder

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Reference no: EM132833982

Problem 1: Which bond makes no interest payments?

a. A bond whose coupon rate is equal to the market interest rates.

b. A bond whose coupon rate is greater than the market interest rates.

c. A bond whose coupon rate is less than the market interest rates.

d. A zero coupon bond.

Problem 2: A 6-percent corporate coupon bond is callable in 10 years for a call premium of one year of coupon payments. Assuming a par value of 1,000 dollars, what is the price paid to the bondholder, if the issuer calls the bond?

a. 60 dollars.

b. 600 dollars.

c. 1,000 dollars.

d. 1,060 dollars.

Reference no: EM132833982

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