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Interest on Debentures

The debenture...

Question

The debentures issued with specified rate of interest is called _____.

A

Issue rate

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B

Coupon rate

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C

Zero rate

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D

None of the above

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Solution

The correct option is B Coupon rate
Specific coupon rate debentures are issued with a specified rate of interest, which is called as coupon rate. The specific rate may either be fixed or floating.The floating interest rate is usually tagged with the bank rate.

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