Q536
If coupon rate is equal to going rate of interest then bond will be sold
A.
at par value
AnswerB.
below its par value
C.
more than its par value
D.
seasoned par value
Answer: Option A
Solution
Answer: Option A
Solution:
If coupon rate is equal to going rate of interest then bond will be sold at par value. A coupon payment on a bond is the annual interest payment that the bondholder receives from the bond's issue date until it matures. 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.