Bond yields

Question 1

The following is taken from the S&P Bond Guide: FLB Zr 37 87 87½. What is the coupon rate on this bond?

A)
8.70%
 B)
0.37%
 C)
8.75%
 D)
0%

Answer 1

D) 0%

Explanation
FLB is the issuer, Zr means zero coupon, 37 indicates the year of maturity (2037), 87 is the bid price ($870), and 87½ is the asked price ($875).

LO 4.e