Which of the following best describes a bond's coupon rate?
- A The annual interest paid as a percentage of face value
- B The bond's current market yield
- C The total return if held to maturity
- D The credit rating of the issuer
Answer
The annual interest paid as a percentage of face value
The coupon is fixed at issue and paid on the face value. Current yield and yield to maturity both vary with the market price.





