As a Bond Approaches Its Maturity Date, Its Sales Price

question 90

Multiple Choice

As a bond approaches its maturity date, its sales price approaches

• A) the price of comparable bonds.
• B) U.S. Treasury bond prices.
• C) the par value.
• D) the par adjusted for yield to maturity.

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Definitions:

Transactions Demand

The demand for money as a medium of exchange, reflecting the desire to hold money for everyday transactions.

Banks Create Money

The process by which commercial banks lend more than the reserves they hold, effectively creating new money through the issuance of loans.

Large Denomination

Currency units or financial instruments that represent a large value, making them efficient for high-value transactions but also potentially attractive for illicit activities.

Economic Conditions

The state of the economy at a given time, including factors such as employment rates, inflation rates, and gross domestic product.