Im across how the yield works, what im looking to learn about is what determines the coupon rate. So on a bond with a 4% coupon, why is it set at 4%? is it inflation? is it the current yields producing 3.5% so to be marketable they must be higher? Does the someone just choose a random rate??!?
I would expect there is a determining factor that sets these rates and that its in relation to something in particular, any ideas on that side of things?
