Investing and Wealth Management Practice Test 2026 – Complete Exam Prep

Coupon rate is the fixed annual interest rate stated on a bond, calculated as a percentage of the bond’s par value. It determines how much interest the issuer pays each year and is the figure used to compute the dollar amount of the yearly coupon payoff (for example, a 5% coupon on a $1,000 par value pays $50 per year, usually split into two semiannual payments). This concept is different from par value (the face value of the bond) and maturity (the time until the principal is repaid), and from yield (the actual return considering the price you paid and changes in value over time).