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27 January, 21:28

What is the annual rate of return on a bond bought on the open market called?

A. coupon rate

B. yield

C. maturity

D. par value

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Answers (2)
  1. 27 January, 22:24
    0
    A. coupon rate

    Explanation:

    The coupon rate is the yearly yield rate that bondholder receives for investing in a bond. It is the interest rate that investors earn by purchasing the bond. The coupon rate remains constant from the date of issue until maturity. It is calculated from the maturity value and is stated at the time of bond issuance.

    The coupon rate is one of the main determinants of bond attractiveness. A high coupon rate makes the bond attractive to investors. A high-interest rate means that investors will receive higher returns on regularly.
  2. 27 January, 23:21
    0
    Answer:B. yield
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