A Bond's Principal Value Is Also Referred to as the Maturity

question 104

Multiple Choice

A bond's principal value is also referred to as the maturity value because:

• A)it is always repaid at a discount prior to the bond's maturity.
• B)it is written on the face of the debt contract.
• C)it is repaid at the maturity date.
• D)it is added to interest payments that are repaid at the maturity date.
• E)it is issued at a value below par value to generate a positive capital gain.

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Definitions:

Elastic Demand

A scenario in which a notable fluctuation in the demand for a product or service occurs due to a variation in its price.

Marginal Cost

The extra expense associated with making an additional unit of a product or service.

Hardcover Books

Books bound with rigid protective covers, often made of wood, cardboard, or similar materials, offering higher durability than paperback versions.

Paperback

A book bound in a flexible paper cover, often less expensive than hardcover editions.