An investor who expects declining interest rates would maximize their capital gain by purchasing a bond that has a _ coupon and a _ term to maturity.

Question

An investor who expects declining interest rates would maximize their capital gain by purchasing a bond that has a ___ coupon and a ___ term to maturity.

asked Oct 14, 2021 33.5k views

1 Answer

← Prev Question Next Question →

Ask a Question

Akhila · Answer 1 · 2021-10-20T21:07:00+0000

Answer: zero; long

Step-by-step explanation:

An investor who expects declining interest rates would maximize their capital gain by purchasing a bond that has a zero coupon and a long term to maturity.

In this case, a zero-coupon bond will b chosen since the face value will have to be repaid when the bond matures.

An investor who expects declining interest rates would maximize their capital gain by purchasing a bond that has a _ coupon and a _ term to maturity.

Please log in or register to add a comment.

Please log in or register to answer this question.

1 Answer

Please log in or register to add a comment.

No related questions found

Categories

Other Questions