Assuming that the bond issuer does not default on any payments, is it possible to lose money on a bond investment? Discuss briefly.

Name: Assuming that the bond issuer does not default on any payments, is it possible to lose money on a bond investment? Discuss briefly.
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Question

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The Answer is Yes. If, during the holding period, the capital loss (due to a rise in the prevailing market rate of return) exceeds the coupon interest paid on the bond, you will suffer a net loss on the bond investment.

Assuming That the Bond Issuer Does Not Default on Any