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:

Shipping Cost

The expense associated with moving goods from one location to another, including packing, logistics, and transportation fees.

Demand

Refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a specified time period.

Improvement Index

Refers to a quantitative measure used to indicate the level of improvement in a process or system over time.

Stepping-stone

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