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Financial Instruments

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Financial Instruments

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by Avataryashgupta04.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • February 28, 2019 at 5:13 pm #506870
    Avataryashgupta04
    Participant
    • Topics: 7
    • Replies: 8
    • ☆

    Can you please tell me what is difference b/w effective interest rate and coupon rate?

    February 28, 2019 at 8:28 pm #506896
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    The coupon rate is the legally binding amount of interest that is paid based on the coupon value of the instrument.

    The effective rate is the rate that is derived by accountants to take into consideration the substance of the interest rate implicit in the instrument, taking account of the coupon interest plus and redemption premium.

    March 4, 2019 at 3:59 pm #507451
    Avataryashgupta04
    Participant
    • Topics: 7
    • Replies: 8
    • ☆

    Thanks for the answer.

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘Financial Instruments’ is closed to new replies.

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