(I) A discount bond requires the borrower to repay the principal at the maturity date plus an interest payment. (II) A coupon bond pays the lender a fixed interest payment every year until the maturity date, when a specified final amount (face or par value) is repaid.
举一反三
- A coupon bond pays the owner of the bond a fixed interest payment (coupon payment) every year until the maturity date, when a specified final amount (face value or par value) is repaid. （ ） A: True B: False
- When the lender provides the borrower with an amount of funds that must be repaid to the lender at the maturity date, along with an additional payment for the interest, it is called a ______
- A loan that requires the borrower to make the same payment every period until the maturity date is called a _________
- As the coupon rate of a bond increases, the bond's:() A: face value increases B: current price decreases C: interest payments increase D: maturity date is extended
- If the annual market discount rate is 6%, the value of a three-year bond that has a 7% coupon rate, has a maturity (par) value of $1,000, and pays interest annually is closest to: A: $1,026.73. B: $1,049.17. C: $973.76.