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What is the relationship between coupon rate on a bond and security provisions?
Wiki User
∙ 14y ago
Coupon Rate: The actual interest rate on the bond, usually payable in semiannual installments. The coupon rate normally stays constant during the life of the bond and indicates what the bondholder's annual dollar incomes will be.
Bond Security Provisions:
- Secured Debt: Specific assets are pledged to bondholders in the event of default (inability to pay the debt).
- Mortgage Agreement: Real property is pledged as a security (collateral) for the loan.
- After-acquired property clause: Requires any new property to be placed under the original mortgage.
Specific security provisions can determine the coupon rate. Due to the specific asset claims in a secured bond most companies will opt for the unsecured debt as it will give the bondholder a claim against the corporation as oppose to a lien against an asset.
Wiki User
∙ 14y ago
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Show the relationship between required rate of return and coupon rate on the value of a bond?
bal amar pel
Distinguish between deep discount bond and zero coupon bond?
the main difference between deep discount bond and zero coupon bond is that in case of zero coupon bond no int is payable periodically while in case of deep discount bond int is payable periodically at very lower rate say 2% per annum
Does interest start to accrue on purchase date or settlement date for bonds?
You are correct that the calculation of interest payments on bonds, asset-backed securities (ABS), mortgage-backed securities (MBS), and fixed-income securities often follows a settlement date approach. The settlement date approach is a common method used in financial markets to determine when interest payments are made to bondholders and investors. Here's how it works: Settlement Date: The settlement date is the date on which a financial transaction is completed, and ownership of the security is transferred from the seller to the buyer. It's also the date on which the purchase price is paid, and the security is delivered to the buyer. Accrued Interest: When a bond or fixed-income security is bought or sold between interest payment dates (coupon dates), the buyer typically pays the seller the accrued interest. Accrued interest is the interest that has accrued on the security since the last coupon payment date. Regular Coupon Payments: The issuer of the bond or security makes regular coupon payments to the bondholders on specified dates, typically semiannually or annually. These coupon payments are based on the nominal or face value of the security and the coupon rate. Adjustment at Settlement: When a security is bought or sold, the accrued interest is adjusted at the settlement date. The buyer compensates the seller for the accrued interest that has accumulated up to that point. Next Coupon Payment: After the settlement date, the new owner of the security is entitled to receive the next scheduled coupon payment in full, as they have compensated the seller for the accrued interest. The settlement date approach ensures that the buyer receives the full coupon payment for the period they hold the security, while the seller is compensated for the interest that accrued during their ownership. This approach is especially important in fixed-income markets because it provides a fair way to account for the interest payments between coupon dates, ensuring that both the buyer and seller receive their respective portions of the interest income based on their ownership periods. It also allows for a clear delineation of responsibilities regarding interest payments and accruals when securities change hands. It's worth noting that in some cases, the interest calculation method may vary depending on the specific terms and conventions outlined in the bond or security's prospectus or offering documents. Therefore, it's essential to refer to the specific terms of the security in question to understand how interest payments are calculated and when they are made.
Is the coupon rate or yield rate paid on a bond?
Coupon rate
What is the size of a long coupon bond?
A long coupon bond is 8.5 x 14.
What is the relationship between the coupon rate and the YTM for premium bonds?
klk
What is a zero coupon?
A zero coupon is, in a financial sense, a security which does not pay interest periodically.
Show the relationship between required rate of return and coupon rate on the value of a bond?
bal amar pel
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
What can a person find coupons for McAfee Security Center?
On McAfee's website, it has several different coupon codes. There are four offers for 50% off Total Protection, All Access, Internet Security and Antivirus Plus. There's also a coupon for 30% off Internet Security for a Mac.
What is the difference between yield and coupon rate?
The difference between the coupon rate and the required return of a bond is dependent upon the type of bond. Junk bonds will have the biggest difference between its return and the coupon rate.
What is coupon rate?
Coupon rate is simply just the annual coupon payments paid by the issuer relative to the bond's face or par value.Coupon rate can be calculated by dividing the sum of the security's annual coupon payments and dividing them by the bond's par value. For example, a bond which was issued with a face value of $1000 that pays a $25 coupon semi-annually would have a coupon rate of 5%.Source: investopedia
How do you use web coupons without having to install a program on your computer?
The coupon printer helps RedPlum and the manufacturer manage the overall distribution and security of coupons and offers in circulation. Better security enables manufactures to continue to pass on great savings to you. Coupon printer applications are also used by other major coupon sites. http://www.redplum.com/info/faq.aspx
What is the difference between coupon and voucher?
NONE!!!!!!!!!they are exactly the same
Can an employer deduct a mechanics pay because a customer uses a coupon?
An employer cannot deduct from your pay without your prior written permission - not union dues, not Social Security, not fed tax withholding. Certainly not the value of a coupon.
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 difference between a discount coupon and a special coupon in marketing?
discount coupons are something given for a specific discount, probably happens often. a special coupon is when there is a special run. doesn't happen often and has a short exp window.
