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

Question

Quizplus · Accepted Answer

All of the given options can cause a bond investor to lose money. Selling a bond prior to maturity at a time when the market interest rate exceeds the bond's interest rate may result in a lower selling price than the purchase price, causing a loss. Converting a bond into shares of common stock that have a lesser combined value and immediately selling those shares result in a loss. If the issuer goes out of business when there are insufficient assets to pay the bondholders, the bond investors may lose their investment. Default by the issuer means that the issuer fails to pay back the borrowed amount along with the interest, resulting in a loss for bond investors.

Which of the Following Can Cause a Bond Investor to Lose