The bond's market rate of interest is the rate that borrowers are willing to pay, and lenders are willing to accept for a particular bond and its risk level.
If the agreement fee is much less than the marketplace fee, the bond will promote at an quantity much less than face (that is referred to as a discount). If the agreement fee is extra than the marketplace fee, the bond will promote at an quantity extra than face (that is referred to as a premium).
The coupon fee is the fee of hobby the bond company pays at the face cost of the bond, expressed as a percentage.1 For example, a 5% coupon fee approach that bondholders will obtain 5% x $1,000 face cost = $50 each year. Coupon dates are the dates on which the bond company will make hobby payments.
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