Glossary of Municipal Securities Terms

COUPON OR COUPON RATE

The periodic rate of interest, usually calculated as an annual rate payable on a security expressed as a percentage of the principal amount. The coupon rate, sometimes referred to as the “nominal interest rate,” does not take into account any discount or premium in the purchase price of the security. See: COUPON BOND; INTEREST RATE. Compare: CURRENT YIELD; EFFECTIVE INTEREST RATE; YIELD TO MATURITY.

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