Question

A 30-year Treasury bond is issued with face value of $1,000, paying interest of $60 per year. If market yields increase shortly after the T-bond is issued, what is the bond’s coupon rate?

Answer 1

6%

Step-by-step explanation:

The face value of the bond is $1,000 and the coupon of the bond is $60.

The coupon rate of the bond = $60 / $1,000 = 0.06 = 6%

Hence, the coupon rate is 6%