John Invested in a New Issue Corporate Bond on the Primary

question 71

True/False

John invested in a new issue corporate bond on the primary market for $1,000, with a coupon rate of 7%, and a maturity date of 2025. The bond was held in his brokerage account electronically, so he did not think about it on a daily basis. In 2020, he thought about selling the bond on the secondary market to help pay for his school tuition. At that time, interest rates had climbed to 8.5%. This was great news for John because now he could sell his bond for more than the principal amount he would receive in 2025.

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Definitions:

Automobile Company

A business entity that manufactures and sells vehicles, including cars, trucks, and motorcycles.

Indian Citizen

A person recognized under the law of India as a legal member of the Union of India, with rights and obligations.

Social System

An organized set of relationships among individuals and groups in society, functioning together within a community or an organization.

Technical System

An organized collection of technologies, machines, and processes used to achieve a specific objective or to perform a particular function.