When the coupon payment is determined using an interest rate, what is this rate referred to as?

Bonds and Bond Valuation MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Bonds and Bond Valuationfinance-mcqs › bonds-and-bond-valuation
Published
15 Jan 2019
Last updated
28 May 2026

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Explanation

The interest rate used to calculate the coupon payment on a bond is known as the coupon rate. It represents the annual interest paid by the issuer to the bondholder based on the bond's face value.

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