If a bond has a face interest rate of 6 percent,a face value of $40,000,and pays interest semiannually,each interest payment will amount to $1,200.

Question

Quizplus · Accepted Answer

Since the bond has a face interest rate of 6 percent and a face value of $40,000, the annual interest payment would be 6% x $40,000 = $2,400. Since the interest is paid semiannually, each interest payment would be half of that amount, which is $1,200. Therefore, the statement is true.

If a Bond Has a Face Interest Rate of 6