The government of Brunasia issues bonds with a guarantee to make periodic interest payments on the par value. The government offers a 6.5% interest on its bonds. In this case, the percentage of interest offered by the government of Brunasia is called the ___.

Coupon rate

Explanation:

Bonds are fixed-income securities that involves a contractual obligation between the lender and the borrower wherein the lender makes certain funds available to the borrower in return for periodic interest payment-coupon rate as well as the repayment of principal upon redemption.

Coupon rate is the  fixed interest payment on the bonds on semi-annually or annually basis.The coupon rate is a way of making cash available to investors in the bonds from time to time for transactionary purposes.

Imagine a pensioner that invested his entire retirement benefits in bonds,that would require  some cash on regular basis to keep body and soul together,that is power of coupon interest.

the answer is risk management planning

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