If a bond's required return always equals its coupon interest rate, its bond's value will remain at par until it matures.

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Quizplus · Accepted Answer

This is true. When a bond's required return (yield) is equal to its coupon rate, there will be no difference between the bond's stated interest payments and the yield that investors demand from the bond. Therefore, the bond's price will equal its face value (par value). As long as there are no changes in the interest rate environment or the creditworthiness of the bond issuer, the bond's value will remain at par until maturity.

If a Bond's Required Return Always Equals Its Coupon Interest