This statement is False, as, for a corporate bond with an annual coupon, the coupon payment is equal to the bonds per value times the coupon rate. Interest rates and prices are negatively correlated.
What is a Coupon Rate ?
- A fixed-income security's nominal yield is expressed as a COUPON RATE . It refers to how often the issuer pays yearly coupons in relation to the bond's face value or par value.
- Thus, the nominal return that a fixed-income security pays out is known as a coupon rate.
- The coupon holder will yield less than the current market circumstances when the market improves, as the bond won't pay more because its value was predetermined at issue.
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