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Glossary · PSX term

Coupon rate.

The coupon rate is the annual interest a bond pays, stated as a percentage of its face value.

Definition

Coupons are usually paid on a fixed schedule and can be fixed or floating, for example linked to KIBOR. The coupon is set at issue, while the bond's yield changes as its market price moves.

Worked example

A Rs. 100 bond with a 12% coupon pays Rs. 12 a year in interest.

Related on PSX Clarity

Term
Bond
Term
Yield to maturity
Term
Treasury bills (T-bills)
Term
KIBOR

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