As the maturity date of a bond approaches, the bond's market value approaches its par value.

Question

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As the maturity date nears, a bond's market value tends to converge towards its par value. This is because the closer a bond is to maturity, the less likely it is that the issuer will default on the bond, so investors are willing to pay a higher price for the bond. At maturity, the bond will be redeemed at its par value.

As the Maturity Date of a Bond Approaches, the Bond's