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Zorluk: KolayDebt Securities and Bond Structure

An investor purchases 5 corporate bonds, each having a par value of 1,0001,000 and a stated nominal coupon rate of 4.8%4.8\%. What is the total annual interest income, in dollars, that the investor will receive from this holding?

Cevap: 240 USD

Cevap

The total annual interest income received by the investor is $240.
A bond's coupon rate represents the percentage of its par value (1,000)paidannuallyininterest.Eachbondpays1,000) paid annually in interest. Each bond pays 4.8\% \times \1,000=$481,000 = \$48 per year. For an investor holding 5 bonds, the total annual interest income is 5×$48=$2405 \times \$48 = \$240.

Adım Adım Çözüm

1
Determine the annual interest payment for one bond
$48 per year
The stated coupon rate is calculated based on the bond's par value of 1,000.1,000. \1,000×4.8%=$481,000 \times 4.8\% = \$48.
2
Calculate the total annual interest for the portfolio of 5 bonds
$240 per year
Multiply the annual payout of one bond (48)bythetotalnumberofbondsheld(5):48) by the total number of bonds held (5): \48×5=$24048 \times 5 = \$240.

Anahtar Kavram

Calculating annual coupon interest income for debt securities
Tahmini Süre:45s
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Konular

Debt Securities and Bond Structure

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