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In finance, a coupon is the interest payment received by a bondholder from the date of issuance until the date of maturity of a bond. [1] Coupons are normally described in terms of the "coupon rate", which is calculated by adding the sum of coupons paid per year and dividing it by the bond's face value. [2] For example, if a bond has a face ...
Coupon: The annual interest rate paid on your borrowed money, equal to a percentage of the bond’s face value. This is generally paid out semiannually. This is generally paid out semiannually.
The coupon rate (nominal rate, or nominal yield) of a fixed income security is the interest rate that the issuer agrees to pay to the security holder each year, expressed as a percentage of the security's principal amount or par value. [1] The coupon rate is typically stated in the name of the bond, such as "US Treasury Bond 6.25%".
Volatility and interest rate risk: Without regular interest payments to cushion price fluctuations, zero-coupon bonds are more volatile than short-term bonds. In general, the current value of any ...
In finance, a bond is a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. [1])
A Treasury bond’s coupon rate – or interest paid – stays fixed for the life of the bond, but the bond’s price can change if traded on the market.
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