The tendency of the variance of a bond's price to decrease as maturity approaches is called
A)open interest.
B)pull-to-par.
C)digital default option.
D)futures option.
E)credit spread call option.

Question

Quizplus · Accepted Answer

The tendency for the variance of a bond's price to decrease as maturity approaches is called pull-to-par. This means that as a bond approaches its maturity date, its price will tend to be more stable and closer to its par value.

The Tendency of the Variance of a Bond's Price to Decrease