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
A: face value increases
B: current price decreases
C: interest payments increase
D: maturity date is extended
举一反三
- For a $100 face value bond that pays $7 coupon annually, if market interest rates change from 8 to 9%? The coupon rate: A: increases to 8%. B: increases to 9%. C: remains at 7%. D: increases to nearly 9%.
- A bond's current market value is equal to the present value of the coupon payments plus the present value of the face amount.
- When bond interest rates become less volatile, the demand for bonds _________ and the interest rate _________. A: increases; rises B: increases; falls C: decreases; falls D: decreases; rises
- 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
- (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.