1. A coupon bond pays the owner of the bond A) the same amount every month until the maturity date. B) a fixed interest payment every period, plus the face value of the bond at the maturity date. C) the face value of the bond plus an interest payment once the maturity date has been reached. D) the face value at the maturity date. E) none of the above.

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Business

Gracie Velazquez

29 September, 23:20

1. A coupon bond pays the owner of the bond A) the same amount every month until the maturity date. B) a fixed interest payment every period, plus the face value of the bond at the maturity date. C) the face value of the bond plus an interest payment once the maturity date has been reached. D) the face value at the maturity date. E) none of the above.

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Aarav · Answer 1

B) a fixed interest payment every period, plus the face value of the bond at maturity

Explanation:

A Bond refers to security for raising long term finance whereby the borrower agrees to pay the lenders, a fixed coupon rate of payments periodically coupled with repayment of debt at maturity.

A coupon bond is usually referred to as a bearer instrument which does not record the name of the purchaser, and makes semi annual coupon payments and principal repayment upon maturity.

Such bonds are rarely issued since the start of online securities listing and trading. Certificates are no longer or rather say rarely issued.