Suppose a bond promises to make a single payment at maturity. These types of bond are called:
A) discount bonds.
B) corporate bonds.
C) indexed bonds.
D) junk bonds.
E) government bonds.

Question

Quizplus · Accepted Answer

A bond that promises to make a single payment at maturity is a discount bond, because it is sold at a price below its face value and the payment at maturity represents the difference between the face value and the purchase price. Corporate bonds, indexed bonds, junk bonds, and government bonds can all have different payment structures, such as periodic interest payments or different maturities.

Suppose a Bond Promises to Make a Single Payment at Maturity