Match each term with its definition or explanation. Terms can be used more than once.

Definition$/$Explanation

Term

Frequency with which cash interest payments are made to the bondholders

Nominal rate

Principal

Occurs when a bond issue is priced below par value

Occurs when the effective interest rate is higher than the stated interest rate

Par value

Occurs when a bond issue is priced above par value

Amount of interest that the bond issuer will pay in cash expressed as an annual rate

Occurs when the effective interest rate is lower than the stated interest rate

Face rate

Actual return that the investors will receive

Specified date when the bond issuer must pay the face value of the bonds to the bondholders

Coupon rate

The amount that the company will pay the bondholder at maturity