(I)The Coupon Rate Is the Rate of Interest That the Issuer

question 10

Multiple Choice

(I) The coupon rate is the rate of interest that the issuer of the bond must pay.
(II) The coupon rate on old bonds fluctuates with market interest rates so they will remain attractive to investors.

• A) (I) is true, (II) false.
• B) (I) is false, (II) true.
• C) Both are true.
• D) Both are false.

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