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Perpetuity, Sinking Funds & Bonds · Question 45 of 63

Question 45

MediumOriginal question

A bond with face value ₹5,000 has a coupon rate of 9% a year, paid half-yearly. How much does it pay every half-year?

Options for question 45

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. The yearly coupon is 9%×5,000=4509\% \times 5{,}000 = 450 rupees.

  2. Paid in two halves: 225 rupees every half-year.

Worth noting

₹450 is the coupon for the whole year.

Concept
The coupon payment
Typical time
90 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.