NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities
A DP client holds 500 units of a demat bond with a face value of Rs 1,000 each and a coupon of 8% per annum paid annually. What annual interest will the issuer pay on this holding as of the record date?
The annual interest is Rs 40,000. The holding has a face value of Rs 5,00,000 (500 units of Rs 1,000), and an 8% coupon on that amount gives Rs 40,000 per year.
- ARs 4,000
- BRs 40,000Correct
- CRs 80,000
- DRs 8,000
Explanation
Total face value = 500 x 1,000 = Rs 5,00,000. Interest at 8% = Rs 40,000. Rs 4,000 uses 0.8%, Rs 80,000 uses 16%, and Rs 8,000 uses 1.6% of the face value.
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