A coupon bond involves
A) interest payments from the borrower to the lender periodically during the life of the loan and payment by the borrower to the lender of the face value of the loan at maturity.
B) interest and principal payments from the borrower to the lender periodically during the life of the loan.
C) periodic payments by the borrower to the lender that include both principal and interest.
D) periodic payments by the borrower to the lender that include principal, but not interest.

Question

Quizplus · Accepted Answer

A coupon bond involves periodic interest payments from the borrower to the lender during the life of the loan, and payment of the face value of the loan at maturity. This option describes these characteristics accurately. The other options either do not include interest payments or do not include payment of the face value at maturity.

A Coupon Bond Involves