Which of the following terms represents the stated interest rate of a bond?
A) liquidity rate
B) market rate
C) prime rate
D) coupon rate

Question

Quizplus · Accepted Answer

The coupon rate is the stated interest rate of a bond, which is the rate at which the bond pays interest to the bondholder. The liquidity rate is the rate at which an asset can be bought or sold without affecting its market price. The market rate is the current market interest rate, which is determined by supply and demand in the bond market. The prime rate is the interest rate that banks charge their most creditworthy customers, and it is typically used as a benchmark for other interest rates. None of these terms represent the stated interest rate of a bond except for the coupon rate.

Which of the Following Terms Represents the Stated Interest Rate