1. Periodic receipts of interest by the bondholder are known as:
a. the coupon rate
b. a zero-coupon
c. coupon payments
d. the default premium
Explain
2. Consider a 3-year bond with a par value of $1,000 and an 89% annual coupon. If interest rates change from 8 to 6% the bond's price will:
a. Increase by $51.54
b. Decrease by $51.54
C. Increase by $53.46
D. Decrease by $53.46
Show work/Explain