- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 6. Fixed-Income Bond Valuation: Prices and Yields
- Subject 3. Relationships between Bond Price and Bond Characteristics
CFA Practice Question
The price of the bond ______ as its life approaches maturity when the interest rate is constant for a ______ bond.
B. increases; discount
C. stays constant; premium
A. increases; premium
B. increases; discount
C. stays constant; premium
Correct Answer: B
User Contributed Comments 5
| User | Comment |
|---|---|
| WaheedAbbasKhan | ..because FV at maturity is always going to be 100 at maturity. So when a bond is selling at discount, i.e. lower than the par, price start to gradually pull towards the par, eventually reaches at par, at maturity |
| SKIA | way to use your whole name guy! |
| Shaan23 | That is funny. Like the username. My favorite username on this website so far and I still laugh was Antihead |
| farhan92 | pull to par baby! |
| chesschh | empujale al par hombre! |