At the Time You Purchase a Bond and Assuming All

question 59

Multiple Choice

At the time you purchase a bond and assuming all interest payments are made on time, you know the exact holding period return you will earn if

• A) the bond is called at any time prior to maturity.
• B) you resell the bond in exactly one year from the date of purchase.
• C) the market rate of interest declines within the next year.
• D) you hold the bond to maturity.

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Definitions:

Diversity of Citizenship

A legal principle allowing federal courts to hear cases in which the parties are citizens of different states or countries.

Federal Substantive Law

Pertains to the body of law that creates, defines, and regulates the rights and duties of parties within the United States federal legal system.

State Substantive Law

Laws that govern how matters such as contracts, property, and family issues are to be handled within a state.

Federal Procedural Law

Rules that govern the procedures for courts and judicial administration within the federal legal system.