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    Lecture 1 (1) .12

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    kanye
    A bond pays annual interest payments called coupons expressed as a percentage of the bond's face value. For example, a 5% coupon bond pays $5 annually for each $100 of face value. A zero-coupon bond does not pay coupons but is sold at a discount and repays the full face value at maturity.

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    Lecture 1 (1) .12

    Uploaded by

    kanye
    7 views1 page
    A bond pays annual interest payments called coupons expressed as a percentage of the bond's face value. For example, a 5% coupon bond pays $5 annually for each $100 of face value. A zero-coupon bond does not pay coupons but is sold at a discount and repays the full face value at maturity.

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    Lecture 1(1).12

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    Lecture 1(1).12

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    A bond pays annual interest payments called coupons expressed as a percentage of the bond's face value. For example, a 5% coupon bond pays $5 annually for each $100 of face value. A zero-coupon bond does not pay coupons but is sold at a discount and repays the full face value at maturity.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    7 views1 page

    Lecture 1 (1) .12

    Uploaded by

    kanye
    A bond pays annual interest payments called coupons expressed as a percentage of the bond's face value. For example, a 5% coupon bond pays $5 annually for each $100 of face value. A zero-coupon bond does not pay coupons but is sold at a discount and repays the full face value at maturity.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    What is a bond?

    The sum of the annual coupons are often


    expressed as a fraction of the FV, e.g. 5 %. We
    call this the coupon rate (C). Lets denote the
    actual coupon, e.g. $5, with ct, where t is the
    period in which we get the coupon.
    A bond with no coupons is called a zerocoupon bond

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