Which security has a higher effective annual interest rate a A 3 month T bill selling at $97,645 with par value $100,000 b A coupon bond selling at par and paying a 10 coupon semiannually ...

a Effective annual rate for 3month Tbill b Effect ...

Which security has a higher effective annual interest rate? a. A 3-month T-bill selling at $97,645 with

Question:

Which security has a higher effective annual interest rate?
a. A 3-month T-bill selling at $97,645 with $100,000.
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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...