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Question

What is the Coupon Rate?

Answer

The Coupon Rate is the amount of gross annual interest or accrued interest paid to the holder.

To explain: You have a holding of £1,000 nominal of 6.5% Treasury stock 2006.  What amount of interest or income will you receive?

The stock will pay you interest at 6.5%.  This is the interest or coupon rate.  It is usually paid half yearly and in our example this would be £32.50 gross of tax paid twice per year.

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