The coupon rate and the required rate for a specific issue of bonds,such as IBM's 7% bonds that were issued in 2011,both vary over time as economic factors change.

Question

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The coupon rate of a bond, such as IBM's 7% bonds issued in 2011, is fixed and does not change over time. It is determined at the time of issuance. However, the required rate of return (or yield) demanded by investors can vary over time due to changes in economic factors.

The Coupon Rate and the Required Rate for a Specific