If you are holding a premium bond you must expect a _______ each year until maturity.If you are holding a discount bond you must expect a _______ each year until maturity.

Question

Quizplus · Accepted Answer

A premium bond is priced above its face value, so it will decrease in value as it approaches maturity, resulting in a capital loss. A discount bond is priced below its face value, so it will increase in value as it approaches maturity, resulting in a capital gain.

If You Are Holding a Premium Bond You Must Expect