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Perpetuity, Sinking Funds & Bonds · Question 35 of 63

Question 35

EasyOriginal question

A bond with face value ₹1,000 pays ₹45 every half-year. What is its coupon rate a year?

Options for question 35

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. A year's coupons are 2×45=902 \times 45 = 90 rupees.

  2. 901,000=9%\frac{90}{1{,}000} = 9\% a year.

Worth noting

4.5% is the rate for a half-year only.

Concept
The coupon rate
Typical time
60 s
Your time
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The rule this testsBonds and their terms
Practise this chapter →

Ten questions from Perpetuity, Sinking Funds & Bonds, at your own pace.

Practise this chapter →

Ten questions from Perpetuity, Sinking Funds & Bonds, at your own pace.