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Revised Finance Questions & Answers
Q. A bond’s coupon rate is equal to the annual interest divided by which one of the following?
- Coupon
- Maturity
- Face Value
- Yield to Maturity
ANSWER: 3. Face Value
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ANSWER IN DETAIL
A bond’s coupon rate is nothing but a bond which is a financial instrument issued by the corporation/government & the investor gets a fixed amount of interest on that bond. It can be calculated by taking the ratio of annual interest dividend to face value of the bond. Therefore, we can say that a bond’s coupon rate is equal to the annual interest divided by face value.
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