What is the 'coupon rate' of a bond with face value $100,000 and cash payments per half year of $2000?
A) 2%.
B) 20%.
C) 4%.
D) We cannot answer without knowing the maturity of the bond.

Question

Quizplus · Accepted Answer

The coupon rate is calculated as the annual coupon payment divided by the face value of the bond. Since the bond pays $2000 every half year, the annual payment is $4000. Therefore, the coupon rate is $4000 / $100,000 = 4%.

What Is the 'Coupon Rate' of a Bond with Face