How often is interest earned from bonds usually paid to the bond holder?Twice per yearEvery two yearsEvery monthOnce per year
Question
How often is interest earned from bonds usually paid to the bond holder?
- Twice per year
- Every two years
- Every month
- Once per year
Solution
In the bond market, the interest earned on bonds, commonly referred to as "coupon payments," is typically paid out to bondholders on a semi-annual basis. This means that bondholders can expect to receive interest payments twice a year.
The frequency of these payments can vary depending on the specific bond's terms; however, most standard corporate and government bonds follow this semi-annual schedule. There are some bonds that may pay interest annually, quarterly, or in some other intervals, but these are less common. This structured payment schedule allows bondholders to receive a steady stream of income throughout the life of the bond until it matures, at which point they receive the principal amount invested.
Final Answer
Interest from bonds is usually paid to the bondholder: Twice per year.
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