Mike just purchased a bond which pays $40 each year in interest.The $40 interest payment is also called the:
A) coupon.
B) par value.
C) discount.
D) call premium.
E) yield.
F) None of the above.

Question

Quizplus · Accepted Answer

The $40 interest payment is known as the coupon rate or coupon payment of the bond. It is the fixed annual interest payment that the bondholder receives from the issuer.

Mike Just Purchased a Bond Which Pays $40 Each Year