Multiple Choice
A bond sells at a discount when the:
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11. Long Term Liabilities
Introduction to Bonds and Bond Characteristics
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A bond's time to ______ is the number of years until the face value is due to be repaid.
A
coupon
B
issuance
C
maturity
D
yield
Verified step by step guidance1
Understand the concept of 'time to maturity': It refers to the number of years remaining until the bond's face value (principal) is due to be repaid to the bondholder.
Review the options provided: 'coupon,' 'issuance,' 'maturity,' and 'yield.' Each term has a specific meaning in bond terminology.
Clarify the term 'coupon': This refers to the periodic interest payment made to the bondholder, not the time until repayment.
Clarify the term 'issuance': This refers to the date when the bond was originally issued, not the time remaining until repayment.
Clarify the term 'yield': This refers to the return on investment for the bond, not the time remaining until repayment. The correct term for the number of years until the face value is repaid is 'maturity.'
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