Asked by Amirul Hasan on May 05, 2024
Verified
The stated interest payment, in dollars, made on a bond each period is called the bond's:
A) Coupon.
B) Face value.
C) Maturity.
D) Yield to maturity.
E) Coupon rate.
Stated Interest Payment
The amount of interest that a bond or loan promises to pay to its holder, usually expressed as an annual percentage of the principal.
Coupon
The interest rate paid by a bond, typically expressed as an annual percentage of the bond's face value.
- Acquire knowledge on the effect of coupon rates and face values on bond pricing.
Verified Answer
KM
Karan MohanMay 09, 2024
Final Answer :
A
Explanation :
The coupon of a bond refers to the interest payment that the bond issuer agrees to make to the bondholder during the life of the bond. It is typically a fixed amount paid at regular intervals, such as annually or semi-annually.
Learning Objectives
- Acquire knowledge on the effect of coupon rates and face values on bond pricing.