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Chapter 19. Working with Bonds > Working with Coupons

Working with Coupons

In the days before electronic trading, if you purchased a bond, you eventually received the actual bond, complete with small chits at the bottom that you had to cut out at the appropriate time and take to the issuer or your bank to get your interest payments. These chits were called coupons, and that's why a bond's interest rate is also called the coupon.

The electronic revolution has not only enabled bondholders to put away their scissors, but it has also given them many tools to work more easily with coupons and coupon dates. You'll learn about a few of these tools in this section.


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