What Happens to a Discount Bond as the Time to Maturity

question 49

Multiple Choice

What happens to a discount bond as the time to maturity decreases?

• A)the coupon rate increases.
• B)the bond price increases.
• C)the coupon rate decreases.
• D)the bond price decreases.

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Definitions:

Lab

Short for laboratory, a controlled environment where scientific research, experiments, and measurement are carried out.

Matrix

A surrounding substance or environment in which something else develops, operates, or is contained; in biology, the intercellular substance of a tissue.

Modified Wave

A scheduling strategy used in healthcare settings to allow for both walk-in and scheduled appointments, aiming to reduce waiting times and improve patient flow.

Cluster

A group of similar things or people positioned or occurring closely together.