Regardless of what interest rates do in the future,the bond's price will approach the par value of the bond as it nears its maturity date.

Question

Quizplus · Accepted Answer

This statement is true. As a bond approaches its maturity date, the remaining time for interest payments and principal repayment decreases, causing the bond's price to approach its par value, which is the amount the issuer originally received for the bond. This is because there is less uncertainty about the future cash flows of the bond as the maturity date nears, which reduces the risk component of the bond's price.

Regardless of What Interest Rates Do in the Future,the Bond's