Consider a

15-year

bond with a face value of

$1,000

that has a coupon rate of

5.8%,

with semiannual payments.

a. What is the coupon payment for this bond?

b. Draw the cash flows for the bond on a timeline.

a. What is the coupon payment for this bond?

The coupon payment for this bond is

$nothing.

(Round to the nearest cent.)

b. Draw the cash flows for the bond on a timeline.

Select the timeline below that shows the correct cash flows for this bond.(Select the best choice below.)

A.The timeline starts at Period 0 and ends at Period 30. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 29. In Period 30, the cash flow is $ 1,000.

Period

0

1

2

29

30

Cash Flows

$29.00

$29.00

$29.00

$1,000

B.The timeline starts at Period 0 and ends at Period 15. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 14. In Period 15, the cash flow is $ 1,000.

Period

0

1

2

14

15

Cash Flows

$29.00

$29.00

$29.00

$1,000

C.The timeline starts at Period 0 and ends at Period 15. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 14. In Period 15, the cash flow is $ 1,029.00.

Period

0

1

2

14

15

Cash Flows

$29.00

$29.00

$29.00

$1,029.00

D.The timeline starts at Period 0 and ends at Period 30. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 29. In Period 30, the cash flow is $ 1,029.00.

Period

0

1

2

29

30

Cash Flows

$29.00

$29.00

$29.00

$1,029.00

Click to select your answer(s).