0
Actually they mean the same thing but they are used in two totally different situations.
Interest Rate is the money paid by a bank that has accepted a deposit from a Customer.
Coupon Rate is the money paid by a person who has issued Bonds to people in return for the money they have given him.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What is the difference between the coupon rate and the interest rate?
Coupon rate is something that is paid semiannually. The interest rate is something that starts as soon as a bond is issued.
What is the interest rate the bond issuer pays to the bondholder called?
The interest rate paid on a bond is known as the coupon rate. A $1,000 fixed rate bond with a 5% coupon rate purchased at par would yield $50 annually in interest payments.
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
Relationship between required rate of return and coupon rate on the value of a bond?
required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond
Difference enters bond's coupon interest rate the current yield y bond-holder's required rate of return?
Difference enters bond's coupon interest rate the current yield y bondholder's required rate of return?
What is the difference between the coupon rate and the interest rate?
Coupon rate is something that is paid semiannually. The interest rate is something that starts as soon as a bond is issued.
What is the interest rate the bond issuer pays to the bondholder called?
The interest rate paid on a bond is known as the coupon rate. A $1,000 fixed rate bond with a 5% coupon rate purchased at par would yield $50 annually in interest payments.
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
How can you estimate interest rate risk?
Interest rate risk is measured by time to maturity and coupon rate
How is accrued interest calculated?
Accrued interest is usually calculated like this: Accrued interest = face value of the bonds x coupon rate x factor. Coupon = Annual interest rate/Number of payments. Factor = time coupon is held after last payment/time between coupon payments.
What is a contractual interest rate on bond referred as?
The "Coupon"
Relationship between required rate of return and coupon rate on the value of a bond?
required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond
Difference enters bond's coupon interest rate the current yield y bond-holder's required rate of return?
Difference enters bond's coupon interest rate the current yield y bondholder's required rate of return?
What is Fixed interest or treasury notes?
Treasury Note is a debt interest and carry a fixed coupon rate of interest. It means the interest rate is fixed on the treasury note and it is given to the holder.
Is zero coupon bond more sensitive to change in interest rate than fixed coupon bond?
The zero coupon bond is more sensitive to change in rate (inflation) because the market value is not based on a fixed coupon.
Are interest rate and rate of return the same?
Yes, the interest rate and rate of return are exactly the same.
How are interest on a bond calculated?
Know the bond's face value, then, find the bond's coupon interest rate at the time the bond was issued or bought, then, multiply the bond's face value by the coupon interest rate it had when issued, then, know when your bond's interest payments are made, finally, multiply the product of the bond's face value and interest rate by the number of months in between payments.
