Engineering Board Exam Reviewer · Bonds · easy
Which of the following best describes a bond's "face value" (also called par value)?
- The amount repaid to the bondholder at maturity
- The current market price of the bond
- The total interest paid over the bond's life
- The bond's annual coupon payment
Answer
A. The amount repaid to the bondholder at maturity
Solution
The face value is the amount printed on the bond that is repaid to the bondholder at maturity.
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