A bond has a face value of $10,000,a price of $12,000,and coupon payments of $2000 for two years.The coupon rate of this bond is

Name: A bond has a face value of $10,000,a price of $12,000,and coupon payments of $2000 for two years.The coupon rate of this bond is
Brand: Quizplus
Rating: 4.9 (49 reviews)

Question

Quizplus · Accepted Answer

The coupon rate is calculated as the annual coupon payment divided by the face value of the bond. Here, the annual coupon payment is $2,000 and the face value is $10,000, so the coupon rate is $2,000 / $10,000 = 0.20 or 20%.

A Bond Has a Face Value of $10,000,a Price of $12,000,and