Corporate bonds

Question

Corporate bonds

Quizplus · Accepted Answer

Corporate bonds offer a return to investors in the form of interest payments, typically paid out semi-annually or annually. The interest rate is set at the time of issuance and remains fixed for the life of the bond, providing investors with a predictable income stream.

Option B - Corporate bonds may experience changes in value as interest rates fluctuate. If interest rates rise, the value of existing bonds decreases, as investors demand a higher rate of return on their investment. Conversely, if interest rates fall, the value of existing bonds increases.

Option C - Corporate bonds do not necessarily appreciate or increase in value as the maturity date nears. The price of a bond may fluctuate based on interest rates, the creditworthiness of the issuer, and other factors.

Option D - Corporate bonds may lose value as the maturity date nears. This is because as the bond approaches its maturity, it becomes less attractive to investors, who may demand a higher yield for a longer-term investment. This can cause the price of the bond to decline.

Corporate Bonds