When the required return is constant but different from the coupon rate, the price of a bond as it approaches its maturity date will ________.

Question

Quizplus · Accepted Answer

When the required return is constant but different from the coupon rate, the price of a bond will approach its par value as it nears its maturity date. This is because the bond's value will increasingly reflect its redemption value rather than its coupon payments.

When the Required Return Is Constant but Different from the Coupon