n NISM Certifications
X NISM Series X
Medium

The difference between ‘coupon’ and ‘yield’ of a debt instrument is that the coupon represents the fixed interest payment, while the yield reflects the effective interest rate considering market price and cash flow timing.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Coupon interest vs profit

  2. Simple vs effective interest

    Correct answer

  3. C

    Actual payment vs accrued income

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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