Bonds trade on an accrual interest basis. This means an investor:
A) can sell a bond at any time without losing the interest that has accrued.
B) can buy a bond at any time and gain the interest accrued from the time of the last payment.
C) can sell a bond at any time and retain the interest portion of the bond.
D) can buy a bond at any time and receive an immediate interest check.

Question

Quizplus · Accepted Answer

When bonds trade on an accrual interest basis, the seller receives the interest that has accrued up to the sale date, ensuring they do not lose the interest earned.

Bonds Trade on an Accrual Interest Basis