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Julia Owns a Bond with a $1,000 Par Value

Question 113

Multiple Choice

Julia owns a bond with a $1,000 par value. If she decides to sell her bond on the secondary market before the maturity date, she:


A) will receive less than $1,000 because the only time the bond is worth the full par value is at maturity.
B) will receive exactly $1,00, because that is the guaranteed value of the bond.
C) could receive more than $1,000 because the bond will pay interest to the buyer, making it an attractive investment.
D) could receive more or less than $1,000 because the market price of bonds is free to fluctuate.

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