What Is a Coupon Rate?
The coupon rate is the yearly interest rate the issuer pays, based on the face value (FINRA).
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1.What is the coupon rate of a bond?
The coupon rate is the yearly interest rate the issuer pays, based on the face value (FINRA).
2.Why is it called a coupon?
On paper bonds you clipped a slip each time interest was due; today it is electronic but the name stuck (orientation only).
3.A bond has a face value of 1,000 and a 4.5 percent coupon. What is paid per year?
Coupon rate times face value; many bonds pay it in two halves of 22.50.
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Sources (5)
- FINRA: Treasury Securities Data Glossary (Eintrag Coupon rate)
- FINRA: Understanding Bond Yield and Return
- Federal Reserve Bank of St. Louis, Page One Economics (Mike Kaiman, November 2023): Why Do Bond Prices and Interest Rates Move in Opposite Directions?
- Wikipedia: Coupon (finance) (nur Orientierung, kein Beleg)
- Eigene Berechnung (synthetische Rechenbeispiele)
Education only. Not financial advice.