A bond’s coupon rate is equal to the annual interest divided by which one of the following?

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Q. A bond’s coupon rate is equal to the annual interest divided by which one of the following?

  1. Coupon
  2. Maturity
  3. Face Value
  4. 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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A bond's coupon rate is equal to the annual interest divided by which one of the following

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