The rate of interest that is printed on the bond is called the ________ rate of interest.

Question

Quizplus · Accepted Answer

The stated rate of interest is the rate printed on the bond and is the rate at which the issuer agrees to pay interest to the bondholder over the life of the bond. The market rate of interest may be different from the stated rate and is determined by supply and demand factors in the financial markets. The variable rate of interest may change over the life of the bond based on some underlying index or benchmark. The maturity rate is not a relevant term when discussing the rate of interest on a bond.

The Rate of Interest That Is Printed on the Bond