Question

Bonds that have interest coupons attached to their certificates, which the bondholders detach during each interest period and present to a bank for collection, are called?

1) Convertible bonds
2) Callable bonds
3) Coupon Bond
4) Serial bonds

Answer 1

Coupon bonds are bonds with detachable interest coupons that are presented to a bank for collection of interest payments during each interest period until maturity.Answer is option c.

Step-by-step explanation:

Bonds that come with interest coupons attached to their certificates are known as coupon bonds. These are traditional types of bonds where the bondholder detaches the coupons provided on the bond certificate during each interest period and presents them to a bank to collect the interest payment.

A coupon bond reflects an interest payment schedule, which is determined by the coupon rate agreed upon at the time of issuance. The bondholder receives periodic interest payments, typically semi-annually, until the bond reaches its maturity date, upon which the final coupon payment and the face value of the bond are paid back to the bondholder, concluding the bond agreement.