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When selecting bonds, interest rate (coupon) and yield are two different concepts. 1. Interest Rate (Coupon Rate) The coupon rate is the fixed percentage paid on the bond’s face value. Formula Annual Interest=Face Value×Coupon Rate Example: Face value = ₹1,000 Coupon rate = 8% Annual interest received: 1000×8%=80 So the bond pays ₹80 ...
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