Question 2? possibleYear9.10$245.0$245.0$245.0$245.0$245.0 + $5,000A corporation issues a bond that generates the above cash flows. If the periods shown are 1 year, which of thefollowing best describes that bond?O A. a 10-year bond with a notional value of $5,000 and a coupon rate of 4.9% paid quarterly.O B. a 10-year bond with a notional value of $5,000 and a coupon rate of 4.9% paid annually.O C. a 10-year bond with a notional value of $5,000 and a coupon rate of 1.225% paid semiannually.O D. a 3-year bond with a notional value of $5,000 and a coupon rate of 2.450% paid monthly.

We need to calculate coupon rate of bond by dividing the coupon amount with face/notional value of…

Year 1 10 $245.0 $245.0 $245.0 $245.0 $245.0 + $5,000 A corporation issues a bond that generates the above cash flows. If the periods shown are 1 year, which of the following best describes that bond? O A. a 10-year bond with a notional value of $5,000 and a coupon rate of 4.9% paid quarterly. B. a 10-year bond with a notional value of $5,000 and a coupon rate of 4.9% paid annually. C. a 10-year bond with a notional value of $5,000 and a coupon rate of 1.225% paid semiannually. O D. a 3-year bond with a notional value of $5,000 and a coupon rate of 2.450% paid monthly.

Year 1 10 $245.0 $245.0 $245.0 $245.0 $245.0 + $5,000 A corporation issues a bond that generates the above cash flows. If the periods shown are 1 year, which of the following best describes that bond? O A. a 10-year bond with a notional value of $5,000 and a coupon rate of 4.9% paid quarterly. B. a 10-year bond with a notional value of $5,000 and a coupon rate of 4.9% paid annually. C. a 10-year bond with a notional value of $5,000 and a coupon rate of 1.225% paid semiannually. O D. a 3-year bond with a notional value of $5,000 and a coupon rate of 2.450% paid monthly.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 5P

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