Asked by Oppong Bright on Apr 24, 2024
If a bond is issued at 101,the coupon rate was:
A) higher than the market rate of interest.
B) lower than the market rate of interest.
C) equal to the market rate of interest.
D) not related to the market rate of interest.
Coupon Rate
Each year, the interest yield on a bond is expressed as a percentage of its nominal value.
Market Rate of Interest
The prevailing rate at which borrowers and lenders agree to transact, influenced by various economic factors.
Bond
A fixed income instrument representing a loan made by an investor to a borrower, typically corporate or governmental.
- Comprehend the relationship between bond issue prices, coupon rates, and market interest rates.
Learning Objectives
- Comprehend the relationship between bond issue prices, coupon rates, and market interest rates.
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