MinaHon2973 MinaHon2973

19-11-2019
Business

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The coupon rate is the rate of interest that the issuer of the bond must pay. (II) The coupon rate is usually fixed for the duration of the bond and does not fluctuate with market interest rates.

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TomShelby TomShelby

21-11-2019

Answer:

TRUE

Explanation:

The coupon rate for a bond is fixed and is paid by the issuer of the bond to the bondholder. The cash outlay/inflow to the issuer/bondholder is always the same reardless of the market rate.

The effect of the market rate is on the cost to acquire the bond in the secondary market. It do not change the coupon obligation.

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