The coupon interest rate is always equal to the market interest rate on the date that bonds are issued.

Question

Quizplus · Accepted Answer

The coupon interest rate and the market interest rate may be different on the date that bonds are issued. The coupon rate is the fixed interest rate that is determined when the bonds are issued, while the market interest rate may fluctuate based on market conditions. If the coupon rate is higher than the market rate, investors may be willing to pay a premium for the bonds. If the coupon rate is lower than the market rate, the bonds may be sold at a discount.

The Coupon Interest Rate Is Always Equal to the Market