Groundlearn / Glossary / Coupon rate
Coupon rate
A CFA term, defined in plain English with the distinction examiners test.
What it means
The annual interest a bond pays, as a percentage of par.
The exam angle
Fixed for the life of a plain vanilla bond. A floater resets against a reference rate plus a quoted margin.
Where it appears in the syllabus
- Fixed IncomeCFA Level I · exam weight 11–14% · Pricing, yield measures, duration, convexity, credit spreads.
Related terms
- Callable bondA bond the issuer may redeem early, usually when rates have fallen.
- ConvexityThe curvature of the price–yield relationship — how duration itself changes as yields move.
- Credit spreadThe extra yield a borrower pays over a risk-free benchmark of the same maturity, compensating for default and…
- Current yieldA bond’s annual coupon divided by its current market price — the cash income it throws off this year per unit invested.
- DurationThe sensitivity of a bond’s price to a change in yield, and equivalently the weighted average time to receiving its…
- Effective durationDuration measured by repricing the bond under small parallel shifts in the benchmark curve, so that changes in cash…
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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