Question

determine the interest payment for the following three bonds (assume $1,000 par value) 3.4% coupon corporate bond paid semi-annually 4.15% coupon treasury note corporate zero coupon Bond maturing in 10 years

Answer 1

A. 3.4% coupon corporate bond paid semiannually

Par Value	$1,000
Interest Rate	3.4%
Payment frequency	Semi-annually

Interest payment per period = $1,000 x 3.4% x 1/2 = $17

B.  4.15% coupon treasury note

The payment frequency is not provided in the question. However, the interest of treasury notes is generally paid semi-annually.

Par Value	$1,000
Interest Rate	4.15%
Payment frequency	Semi-annually

Interest payment per period = $1,000 x 4.15% x 1/2 = $20.75

C. Corporate zero coupon bond maturing in 10 years

As the name suggests, "zero coupon" means no coupon payment is made. Thus, no interest payment is made for zero coupon bonds.