Someone Considering a Bond Purchase Knows Two Things for Certain

question 89

Multiple Choice

Someone considering a bond purchase knows two things for certain ahead of time: the ________ and the ________.

• A) rate of interest; purchase price
• B) default risk; rate of interest
• C) value at maturity; default risk
• D) maturity date; value at maturity
• E) purchase price; maturity date

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Definitions:

P(A|B)

The probability of event A occurring given that event B has already occurred.

Probability

A quantification of the probability that an event will happen, represented as a numerical value ranging from 0 to 1.

Subscriber Owns

Refers to the assets or services a subscriber has purchased and currently possesses.

Probability

A measure of the likelihood or chance of an event occurring; a value between 0 and 1.