A bond is quoted as a 6.5% coupon. The par value of the bond is $1,000, and the market value is $1,200. The bondholder would receive _____ interest per year.

Name: A bond is quoted as a 6.5% coupon. The par value of the bond is $1,000, and the market value is $1,200. The bondholder would receive _____ interest per year.
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Question

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The bondholder receives interest based on the coupon rate and the par value, not the market value. Therefore, 6.5% of the $1,000 par value is $65 per year.

A Bond Is Quoted as a 6