Coupon
Fixed IncomeDefinition
The fixed annual interest rate a bond pays its holder, expressed as a percentage of face value. A 5% coupon on a $1,000 bond pays $50/year (typically split into $25 every 6 months).
Coupon is fixed at issuance and doesn't change with market conditions. As market rates move, the bond's price adjusts to make its yield-to-maturity match prevailing rates — that's why bond prices fall when rates rise.
Coupon is fixed at issuance and doesn't change with market conditions. As market rates move, the bond's price adjusts to make its yield-to-maturity match prevailing rates — that's why bond prices fall when rates rise.
Related tool
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