when the coupon rate on the bond meets, or matches, the demand rate at the time of trade, this results in the bond trading at par value.
A coupon is the interest payment a bondholder receives from the bond's issuing date until its maturity date. Ordinarily, the "coupon rate," which is determined by summing the total annual coupon payments and dividing the result by the bond's face value, is used to characterize coupons. For instance, a bond with a $1,000 face value and a 5% coupon rate would pay a total of $50 in coupons each year. This will typically take the form of two $25 semi-annual payments. Some bonds do not have coupons. Zero-coupon bonds have a coupon rate of 0% because they don't pay any coupons. These bonds only make one payment: the face value on the bond.
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