When a person buys a bond of the XYZ Corporation, he or she can expect to
A. pay the corporation a certain amount of money each quarter of the year.
B. receive the face value of the bond each year and the face value of the bond when the bond matures.
C. receive the coupon rate times the face value of the bond each year and the face value of the bond when the bond matures.
D. receive the face value of the bond each year in perpetuity.
Answer: C
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The infant industry argument is based on the idea that:
a. competitive pressure from established foreign firms would encourage the infant industry's prospects for future growth. b. failure to shelter these infant industries tends to lead to political instability. c. small firms must be protected. d. none of these.
On behalf of your firm, you make frequent trips to Tokyo. You notice that you always have to pay more dollars to get your hair cut than you pay in the U.S. This observation is
a. consistent with purchasing-power parity if prices in Japan are rising more rapidly than prices in the United States. b. consistent with purchasing-power parity if prices in Japan are rising less rapidly than prices in the United States. c. inconsistent with purchasing-power parity, but might be explained by limited opportunities for arbitrage in haircuts across international borders. d. None of the above is correct.