Also known as a principal, what amount is repaid to the investor at maturity?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $24.99Unlock all

Prepare for your Investing and Wealth Management Test. Master the essentials with flashcards and multiple choice questions, complete with hints and explanations. Excel in your investment management exam!

Multiple Choice

Also known as a principal, what amount is repaid to the investor at maturity?

Explanation:
Par value, also called face value, is the amount repaid at maturity. This is the principal—the initial amount you invest—on which coupon payments are based. The coupon represents the periodic interest you receive, calculated as a percentage of the par value. The maturity date is simply when that principal repayment occurs, bringing the investment to a close. Yield measures the overall return you earn, taking into account the purchase price, coupons, and the final repayment, and it can differ from the coupon rate.

Par value, also called face value, is the amount repaid at maturity. This is the principal—the initial amount you invest—on which coupon payments are based. The coupon represents the periodic interest you receive, calculated as a percentage of the par value. The maturity date is simply when that principal repayment occurs, bringing the investment to a close. Yield measures the overall return you earn, taking into account the purchase price, coupons, and the final repayment, and it can differ from the coupon rate.

More Multiple Choice Questions
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy