As a bond approaches its maturity date, its price approaches
A)the price of comparable bonds.
B)U.S.Treasury bond prices.
C)the par value.
D)the par adjusted for yield to maturity.

Question

Quizplus · Accepted Answer

As a bond approaches its maturity date, its price approaches the par value. This is because the par value is the amount the bond issuer has agreed to pay the bondholder at maturity, and as the maturity date approaches, the bondholder becomes more certain about receiving that payment. Therefore, the price of the bond will approach the par value.

As a Bond Approaches Its Maturity Date, Its Price Approaches