The correct answer is C. coupon interest.
Coupon interest is the interest paid on a bond by the issuer to the bondholder. It is usually paid semi-annually, and the amount of the coupon payment is determined by the bond’s face value and interest rate. The face value is the amount that the bondholder will receive when the bond matures, and the interest rate is the percentage of the face value that the bondholder will receive as interest each year.
For example, if a bond has a face value of $1,000 and an interest rate of 5%, the bondholder will receive a coupon payment of $50 every six months. This means that the bondholder will receive a total of $100 in interest each year.
The coupon interest rate is also known as the coupon rate or the nominal interest rate. It is important to note that the coupon interest rate is not the same as the yield on a bond. The yield is the actual return that an investor will receive on a bond, and it is calculated by taking into account the coupon interest rate, the purchase price of the bond, and the maturity date of the bond.
Here is a brief explanation of each option:
- A. payment interest: This is not a technical term in finance. It could refer to any type of interest payment, including coupon interest.
- B. par interest: This is also not a technical term in finance. It could refer to the face value of a bond, which is the amount that the bondholder will receive when the bond matures.
- C. coupon interest: This is the correct answer. It is the interest paid on a bond by the issuer to the bondholder.
- D. yearly interest rate: This is not a technical term in finance. It could refer to the coupon interest rate, which is the percentage of the face value that the bondholder will receive as interest each year.