The Talliru Company bond pays interest semi-annually. You own five of these bonds. What is the amount you will receive as your next interest payment?
A) $76.00
B) $228.00
C) $190.00
D) $456.00
E) $256.00

Question

Quizplus · Accepted Answer

To find the next interest payment, we need to know the bond's face value, coupon rate, and the number of bonds owned. Since the question only provides the number of bonds owned, we cannot calculate the exact answer, but we can eliminate the incorrect choices based on simple estimation. The interest payment will be less than $456.00 (D) because owning five bonds with a face value of less than $10,000 each cannot generate such a large payment. It will also be less than $256.00 (E) because that would mean each bond pays more than $100 in interest per period, and again, that is unlikely with a face value of less than $10,000. Choice B can also be eliminated because it implies a total payment of $456.00 annually, which would require a face value of more than $25,000 for five bonds. Therefore, the only plausible answer is C, which pays $190.00 semi-annually, or $380.00 annually for five bonds.

The Talliru Company Bond Pays Interest Semi-Annually