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At what price will a bond sell if the required rate of return is equal to the coupon rate?

Sagot :

If a bond's purchase price is equal to its par value, its coupon rate equals its yield to maturity. A bond's par value is its face value, or the stated value of the bond at the time of issuance, as determined by the issuing entity.

It is the same as the coupon rate and is the amount of income you receive on a bond expressed as a percentage of your initial investment. If you buy a $1,000 bond and receive $45 in annual interest payments, your coupon yield is 4.5 percent. When the interest rate on a loan rises (when interest rates rise).

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