The _____ of a bond fluctuates continuously during its life.

Question

Quizplus · Accepted Answer

The market value of a bond is the price at which it can be bought or sold in the market, and this value fluctuates continuously during the life of the bond based on various factors such as changes in interest rates, credit rating of the issuer, supply and demand in the market, etc. The principal value or face value of a bond remains the same throughout its life, and the maturity value is the amount that the issuer has to repay at the end of the bond term, which is also fixed. The coupon rate is the fixed interest rate that the issuer pays on the bond, which also remains constant throughout the life of the bond. Hence, the correct answer is E) market value.

The _____ of a Bond Fluctuates Continuously During Its Life