Periodic interest payments on bonds are determined by multiplying the par value of the bond by the bond's contract rate.

Question

Quizplus · Accepted Answer

This is correct, periodic interest payments on bonds are typically made by multiplying the par value of the bond by the bond's contract rate, also known as the coupon rate. This determines the amount of interest the bondholder will receive at each payment date, usually semi-annually or annually.

Periodic Interest Payments on Bonds Are Determined by Multiplying the Par