Asked by marbi mendoza on Jul 01, 2024
Any regular coupon bond of any maturity will sell for its face value if the coupon rate is the same as the market rate of interest.
Coupon Rate
The annual interest rate paid by a bond expressed as a percentage of the face value.
Market Rate
The current interest rate offered in the market for securities or loans.
- Acknowledge the link between bond prices, market interest rates, and coupon rates.
Learning Objectives
- Acknowledge the link between bond prices, market interest rates, and coupon rates.