CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

The price of the bond ______ as its life approaches maturity when the interest rate is constant for a ______ bond.

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!
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