Good question. Answer is No, not necessarily. If you don’t want to hold on to the bond till maturity, you will have to sell it in the bond market. And the price that you will get for it in the market will depend on the prevailing bond price at the time. If the interest rates have gone up since you first bought the bond, for instance, then the price of the bond would have fallen and you will get that lower price from selling the bond. In fact, this is exactly what has happened to a lot of bonds recently as the US has increased interest rates over the last year. Hope this helps.
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This is honestly so well explained and concise. You broke it down amazingly! Thank you so much!
Amazing series
i have a question, if the first lender dont want to keep the bond before the date of maturity, will he get his face value back?
Good question. Answer is No, not necessarily. If you don’t want to hold on to the bond till maturity, you will have to sell it in the bond market. And the price that you will get for it in the market will depend on the prevailing bond price at the time. If the interest rates have gone up since you first bought the bond, for instance, then the price of the bond would have fallen and you will get that lower price from selling the bond. In fact, this is exactly what has happened to a lot of bonds recently as the US has increased interest rates over the last year.
Hope this helps.
thank you
thanks