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2 years ago

When the required return is constant and equal to the coupon rate, the price of a bond as it approaches its maturity date will?

1 answer:

5 0

When the required return is constant and equal to the coupon rate, the price of a bond as it approaches its maturity date will remain at par.

The interest rate that bond issuers pay on the bond's face value is known as the coupon rate. It is the reoccurring interest rate that bond issuers pay to their buyers. Not the issue price or market value, but the bond's face value (or par value), is used to determine the coupon rate.

A coupon is the interest payment a bondholder receives from the bond's issuing date until its maturity date. Ordinarily, the "coupon rate," which is determined by summing the total annual coupon payments and dividing the result by the bond's face value, is used to characterize coupons.

Learn more about coupon rate here

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3 years ago

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