1. The annual coupon rate of a bond equals:

           A)  its yield to maturity.

           B)  a percentage of its price.

           C) the maturity value.

           D) the ratio of the annual coupon payment to the par value.

           E) None of the above

2. The face value of a bond is received by the bondholder:

           A)  at the time of purchase.

           B)  annually.

           C) whenever coupon payments are made.

           D) at maturity.

           E)  none of the above

3. Which of the following presents the correct relationship? As the coupon rate of a bond decreases, the bond’s:

           A)  face value increases.

           B)  bond price tends to increase.

           C) interest payments increase.

           D) maturity date is extended.

           E)  coupon payments decrease