Bond investors who want to sell their bonds before the maturity date in order to make a profit would sell when the

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	bond rating has declined
B	coupon rate his risen
C	par value has fallen
D	yield has fallen

Explanation:

Detailed explanation-1: -If an investor may have to sell a bond prior to maturity and interest rates have risen since thebond was purchased, the investor is exposed tothe coupon effect.

Detailed explanation-2: -Selling Before the Maturity Date If you sell a bond before it matures, you may not receive the full principal amount of the bond and won’t receive any remaining interest payments. The price you receive will depend on where the bond is currently trading on the secondary market.

Detailed explanation-3: -You can hold a bond until it matures or sell it before it matures. EE Bonds, I Bonds, and HH Bonds are U.S. savings bonds.

Detailed explanation-4: -Investors of bonds, however, may decide it is more advantageous to sell a bond rather than hold it to maturity. Some of these reasons include anticipation of higher interest rates, that the issuer’s credit will be lowered, or if the market price seems unreasonably high.

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