Which security has a higher effective annual interest rate a A three month T bill with face value of $100,000 currently selling at $97,645 b A coupon bond selling at par and paying a 10 coupon semiannually ...

a Effective annual rate on a threemonth Tbill b Effec ...

Which security has a higher effective annual interest rate? a. A three-month T-bill with face value of

Question:

Which security has a higher effective annual interest rate?
a. A three-month T-bill with of $100,000 currently selling at $97,645.
b. A bond selling at par and paying a 10% semiannually.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...