Number 20

bonds b. coupon rate is greater than the market rate on similar bonds c. coupon rate is less than the market rate on similar bonds d. this never happens 19. A zero-coupon bond refers to a bond which: a. does not pay any coupon payments because the issuer is in default. b. promises a single future payment. c. pays coupons only once a year. d. pays coupons only if the bond price is above face value. 20. A 30 year, 8.5% coupon bond would provide annual coupon payments that equal a. $850.00 b. $85.00 c. $170.00 d. cannot be determined 21. A 30 year, 5% coupon bond was issued 12 years ago. Similar bonds on the market an offering an 8% return. What is the current market price of this bond? a. $1000.00 b. $1238.42 $974.06 d. $718.84 22. You expect to receive the following cash flows over the next 3 years