CCM Debt Securities Practice Questions - SEC Sri Lanka Certificate In Debt Securities (CCM) Exam

Which of the following defines the coupon rate of a bond?

The annualized rate of return earned by an investor who buys the bond at its current market price. The nominal annual interest rate paid by the issuer to the bondholder, expressed as a percentage of par value. The yield to maturity adjusted for the prevailing inflation rate in Sri Lanka. The discount rate applied to determine the present value of the bond's maturity value.

Correct Answer:

The nominal annual interest rate paid by the issuer to the bondholder, expressed as a percentage of par value.

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