Question
1. Once a bond has been issued, if the holder of the bond retains it until maturity, what will occur with the cash flow and
1.
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Once a bond has been issued, if the holder of the bond retains it until maturity, what will occur with the cash flow and market price of the bond:
the market value of the bond may fluctuate over the life of the bond, but the cash flows will not.
neither the market value of the bond or the cash flows that occur over the life of the bond will change.
the cash flows associated with the bond over its life may change, but the market value will not.
both the market value of the bond and the cash flows may change.
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The rate of return on a security is the:
capital gains rate that a security promises over its life.
interest rate that a security pays over its life.
interest rate that makes the present value of the security's expected cash flows equal to its price.
the current market rate for comparable securities.
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