A Bond has a coupon rate of 10% per annum paid semi annually and the coupon payment made is ₹50, so the face value of the bond is :
Answer & explanation
Correct answer: option 1
$\text{Coupon rate}=10\%\text{ p.a. paid semi-annually}.$
$\text{Rate per half-year}=5\%.$
$\text{Coupon payment per half-year}=50.$
$50=0.05\times \text{Face Value}.$
$\text{Face Value}=\frac{50}{0.05}=1000.$
$\text{Face value of the bond}=₹1000.$