When a bond is issued, it will have
A) an issue date, a maturity date, and an interest rate.
B) a maturity date, a par value, and an interest rate.
C) an issue date, a par value, and an interest rate.
D) an issue date, a maturity date, and a par value.

Question

Quizplus · Accepted Answer

A bond will have a maturity date, which is the date on which the issuer must repay the face value of the bond to the investor. It will also have a par value, which is the amount that the bond will be worth at maturity. Finally, it will have an interest rate, which is the amount of interest that the issuer will pay to the investor over the life of the bond. The issue date is also important, but it is not a defining characteristic of a bond. Therefore, the correct answer is B, which includes all three defining characteristics of a bond: maturity date, par value, and interest rate.

When a Bond Is Issued, It Will Have