At the time you purchase a bond and assuming all interest payments are made on time, you know the exact holding period return you will earn if
A) the bond is called at any time prior to maturity.
B) you resell the bond in exactly one year from the date of purchase.
C) the market rate of interest declines within the next year.
D) you hold the bond to maturity.

Question

Quizplus · Accepted Answer

When you hold a bond to maturity and all interest payments are made on time, you know the exact holding period return you will earn because both the interest payments and the principal repayment at maturity are predetermined.

At the Time You Purchase a Bond and Assuming All