Which of the following can cause a bond investor to lose money?

Question

Quizplus · Accepted Answer

All of these circumstances can cause a bond investor to lose money. Selling a bond prior to maturity and at a time when the market interest rate exceeds the bond's interest rate would mean the bond is worth less than what the investor paid for it. Converting a bond into shares of common stock that have a lesser combined value and immediately selling those shares would also mean the investor loses money. If the issuer goes out of business when there are insufficient assets to pay the bondholders or if the issuer defaults, the bondholders may not receive the full amount of their investment or any payment at all.

Which of the Following Can Cause a Bond Investor to Lose