Multiple Choice QuestionA bond's annual interest rate is sometimes called the ______.Multiple choice question.collateralmaturity ratecoupon rateindenture

Break Down the Problem

1. Identify the keywords in the question: "annual interest rate," "bond," and the multiple-choice options.
2. Determine which term refers to the bond's annual interest rate.

Relevant Concepts

• Coupon Rate: This is the annual interest rate paid on a bond, expressed as a percentage of the face value.
• Collateral: Refers to assets pledged as security for repayment, not related to interest rates.
• Maturity Rate: This typically refers to the date on which the bond will pay back its principal, not the interest rate itself.
• Indenture: A formal agreement, often referring to the terms of a bond, but not specifically about the interest rate.

Analysis and Detail

• The term "coupon rate" directly relates to the annual interest payment bondholders receive.
• Understanding that the coupon rate is crucial for investors, as it indicates how much they can expect to earn from the bond.

Verify and Summarize

• The other terms (collateral, maturity rate, indenture) do not apply to the specific question about the bond's annual interest rate.
• Therefore, the correct answer can be confirmed by evaluating each option against its definition related to bonds.

Final Answer

The correct answer is coupon rate.