3 years ago

A common reason for redeeming a bond prior to its maturity date is ______.

Business

1 answer:

Veseljchak [2.6K]3 years ago

4 0

Answer:

Correct option is (c)

Explanation:

Market interest rate and price of the bond are inversely related.if market interest rate falls and is lesser than stated interest rate (coupon rate), then the bond becomes attractive and its price increases. So, bond can be solved at present higher than the maturity value. This is the reason bond is redeemed before maturity.

On the other hand, if market rate increases, bond becomes less attractive as investors can earn more by investing at market interest rate. So price of bond falls and there is no point redeeming it before maturity.

You might be interested in

All of the following phrases describe a partnership except

tamaranim1 [39]

All of the following phrases describe a partnership except (<span>B) high protection for your personal assets. Being with a partnership, at least, you have this idea of shared responsibility in making decisions for the company. Always, starting with low costs will surely be experienced in partnerships. The involvement between you and your partner will be up to 20 depends on the agreement.</span>

3 0

3 years ago

_is any place where goods are produced or distributed or services areproduced

ella [17]

A factory is any place where goods are produced or distributed or services are produced.

5 0

3 years ago

Suppose that you invest $100 today in a risk-free investment and let the 6 percent annual interest rate compound. What will be t

Kipish [7]

Solution :

It is given that :

Amount of investment or the principle amount , P = $ 100