Jessica paid $2,300 for a bond with a face value of $2,000.She will be paid $300 annually as long as she holds on to the bond,until the bond's maturity date.The coupon rate of the bond is

Question

Quizplus · Accepted Answer

The coupon rate of a bond is calculated based on the bond's face value, not the price paid for it. Here, Jessica receives $300 annually on a bond with a face value of $2,000. The coupon rate is ($300 / $2,000) * 100% = 15%.

Jessica Paid $2,300 for a Bond with a Face Value