0
Who determines the rate of interest paid on a bond?
EncofBizandFinance
Bonds have a predetermined rate of interest called the stated or contract rate, which is established by the board of directors.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
How does corporate bond ratings work?
The leading rating agencies give a rating when a bond is first issued, and that rating determines how high the interest rate on that bond is. A higher rating means the bond will have a lower interest rate.
What does FRB mean on a bank statement?
Fixed rate bond: ie the interest being paid into the nominated account
Who determines interest rate in banks?
inflation
Is the coupon rate or yield rate paid on a bond?
Coupon rate
What occurs when a bond's stated interest rate is greater than the market interest rate?
The bond's price will be in premium, meaning exceed 100
How does corporate bond ratings work?
The leading rating agencies give a rating when a bond is first issued, and that rating determines how high the interest rate on that bond is. A higher rating means the bond will have a lower interest rate.
What is the interest rate the bond issuer pays to the bondholder called?
The interest rate paid on a bond is known as the coupon rate. A $1,000 fixed rate bond with a 5% coupon rate purchased at par would yield $50 annually in interest payments.
What is the difference between the coupon rate and the interest rate?
Coupon rate is something that is paid semiannually. The interest rate is something that starts as soon as a bond is issued.
what interest rate is paid on EE Bonds?
From May 1, 2009 through October 31, 2009, the EE Bond interest rate is 0.70%.
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
What does FRB mean on a bank statement?
Fixed rate bond: ie the interest being paid into the nominated account
How are interest on a bond calculated?
Know the bond's face value, then, find the bond's coupon interest rate at the time the bond was issued or bought, then, multiply the bond's face value by the coupon interest rate it had when issued, then, know when your bond's interest payments are made, finally, multiply the product of the bond's face value and interest rate by the number of months in between payments.
What occurs when a bond's stated interest rate is less than the market interest rate?
Since the current market interest rate is higher, it is more attractive to a new investor then the bond with a lower interest rate. Thus, the price of the lower interest rate bond has to decline to be competitive with new bonds in the market.
Who determines interest rate in banks?
inflation
Do you want a high or low interest rate in a savings bond?
If you are investing in a savings bond, you wish for it to have a high rate of interest. If you are selling savings bonds, you wish it to be at a low rate of interest.
Is the coupon rate or yield rate paid on a bond?
Coupon rate
What occurs when a bond's stated interest rate is greater than the market interest rate?
The bond's price will be in premium, meaning exceed 100
