For an investor who plans to purchase a bond maturing in one year, the primary consideration should be ________.

Question

Quizplus · Accepted Answer

The primary consideration for an investor who plans to purchase a bond maturing in one year should be the yield to maturity. This is because the yield to maturity indicates the total return that an investor can expect to earn on the bond over the holding period, taking into account both the coupon payments and the final principal repayment. The face value and retained earnings may be important factors to consider as well, but they are not as relevant as the yield to maturity for a bond with a short-term maturity. Net income is not directly relevant to the bond purchase decision.

For an Investor Who Plans to Purchase a Bond Maturing