Bond basics · Question 4 of 12
What happens with a classic bond at the end of its term?
1 answer is correct. Easy
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Answer
- A The nominal value is repaid to the investors
Explanation
On the maturity date, the issuer repays the nominal value, provided it is solvent. Anyone who bought the bond below 100 makes a price gain; anyone who bought above 100 makes a price loss. Convertible bonds are a special form with a conversion right.