Question

1. A coupon bond pays the owner of the bond A) the same amount every month until the maturity date. B) a fixed interest payment every period, plus the face value of the bond at the maturity date. C) the face value of the bond plus an interest payment once the maturity date has been reached. D) the face value at the maturity date. E) none of the above.

Answer 1

Answer:

Option "B" is the correct answer to the following statement.

Explanation:

A coupon bond contract, also abbreviated to as a holder stock, is a debt with a stamp that also has tiny attachable vouchers. The vouchers grant the buyer the opportunity to make interest charges from the lender.

In a coupon bond, an investor gets the face value of the bond on maturity with a fixed interest payment.

Answer 2

Answer:

B) a fixed interest payment every period, plus the face value of the bond at maturity

Explanation:

A Bond refers to security for raising long term finance whereby the borrower agrees to pay the lenders, a fixed coupon rate of payments periodically coupled with repayment of debt at maturity.

A coupon bond is usually referred to as a bearer instrument which does not record the name of the purchaser, and makes semi annual coupon payments and principal repayment upon maturity.

Such bonds are rarely issued since the start of online securities listing and trading. Certificates are no longer or rather say rarely issued.