What Could Happen If You Sell a Bond Before Its

question 114

Multiple Choice

What could happen if you sell a bond before its maturity date?

• A)You could have a capital gain.
• B)You could have a capital loss.
• C)You could break even with the price you paid for the bond.
• D)All of the above are correct.
• E)Only A and C are correct.

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Definitions:

Economic Welfare

The overall well-being and standard of living of people within an economy, often measured by indicators like income, health, and education.

Net Private Domestic Investment

The total amount spent by businesses and firms in the economy on capital goods, minus depreciation.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Gross Private Domestic Investment

The total amount of private domestic investment in physical assets such as buildings, machinery, and equipment by businesses and individuals within a country.