Which of the Following Are TRUE for Discount Bonds

question 79

Multiple Choice

Which of the following are TRUE for discount bonds?

• A)A discount bond is bought at par.
• B)The purchaser receives the face value of the bond at the maturity date.
• C)U)S. Treasury bonds and notes are examples of discount bonds.
• D)The purchaser receives the par value at maturity plus any capital gains.

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Definitions:

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Alpha

A coefficient in finance representing the performance of an investment relative to a suitable market index.

Exponential Smoothing

A weighted moving average method that is used in time series forecasting to smooth out data and predict future points.

Three-Month Moving Average

An average calculation that updates by incorporating the most recent three months' data and dropping the oldest month in each new calculation.