Question

Even though most corporate bonds in the United States make coupon payments semiannually, ________.

1) some bonds may make coupon payments annually
2) some bonds may make coupon payments quarterly
3) some bonds may make coupon payments monthly
4) some bonds may make coupon payments daily

Answer 1

Even though most corporate bonds in the United States make coupon payments semiannually, some bonds may make coupon payments annually, quarterly, or monthly.

Step-by-step explanation:

Even though most corporate bonds in the United States make coupon payments semiannually, some bonds may make coupon payments annually, quarterly, or monthly. The frequency of the coupon payments depends on the terms of the bond agreement between the issuer and the bondholder.

For example, a bond may have a coupon payment frequency of annually if the issuer prefers to make larger payments once a year. On the other hand, some bonds may have a coupon payment frequency of quarterly or monthly if the issuer wants to provide more frequent income to the bondholder.

It is important for investors to consider the coupon payment frequency when assessing a bond's cash flow and potential returns.