coupon rate
A coupon rate is the percentage of interest a bond pays you each year based on its face value. For example if a bond has a face value of one thousand dollars and a coupon rate of five percent, you receive fifty dollars per year in interest payments.
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Words beside it
- Burn rate
Cash leaving a business each month net of cash coming in.
- Cap rate
A rental property's yearly net operating income divided by its price. A quick measure of return before borrowing.
- Compound annual growth rate (CAGR)
The steady yearly rate that would turn a starting value into an ending value over a period.
- corporate bond
A loan you give directly to a company instead of a government, and the company promises to pay you back with interest over a set period of time.
- Coupon
A bond's stated annual interest as a percent of face value.
- coupon clipping
This was the old practice of physically cutting small squares off a paper bond and sending them in to receive your interest payment. Today the term just means collecting interest from a bond, even though everything is done electronically now.
- Discount rate
The return you demand to accept future money today; higher rate, lower present value.
- Interest rate risk
The chance a bond's price falls because rates rose.
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