The present value of interest payments for $1,000 for a 5 year bond with a stated coupon rate of 8% in a market rate of 10% is $303.
The nominal return given by a fixed-income instrument is known as a coupon rate. It refers to the annual coupon payments made by the issuer in relation to the face value or par value of the bond.
The nominal yield the bond is stated to pay on its issue date is known as the coupon rate, sometimes known as the coupon payment. The yield to maturity (YTM) of a bond is determined by how this yield fluctuates with changes in the bond's value.
A bond's coupon rate can be determined by dividing the total annual coupon payments made by the security by the bond's par value. A bond issuer chooses the coupon rate depending on the market interest rates that are in effect at the time of the issuance, among other factors.
To know more about, bonds, visit :
https://brainly.com/question/11666148
#SPJ4
