If a Bond's Required Return Always Equals Its Coupon Interest

question 77

True/False

If a bond's required return always equals its coupon interest rate, its bond's value will remain at par until it matures.

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Definitions:

Mutual Funds

Mutual funds are investment vehicles comprised of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

Abnormal Return

A term in finance that refers to the difference between an actual investment return and the expected return, based on the asset's risk and market movements.

Fourth Quarter Earnings

The financial performance of a company in the final quarter of its fiscal year, often used as an indicator of annual performance.

Beta

A financial metric that measures the volatility of a stock or portfolio in comparison to the market as a whole.