Bond Quote Decoder

What does coupon tell you on a bond quote? Payment, not total return Coupon tells the stated interest payment on par value. A 5.00% coupon on $1,000 par pays $50 per year, usually split into two payments. It does not adjust for price paid or call timing. Clean price versus dirty price Settlement check If cash does not tie, look for accrued interest before assuming the price moved. Objection: The 6% coupon means I earn 6%. The coupon is 6%, so that is my return. Premium, discount, and call features can make realized return very different from coupon. Your line…

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