Practice Quiz

FRM Financial Risk Manager Practice Test

Category - Bond

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The maturity date of a bond is...
  1. The date on which the principal amount of a bond is to be paid in full.
  2. The date on which the bond expires.
  3. The date on which the bond’s interest is paid.
  4. The date on which the bond is issued.
Explanation
The Maturity date of a bond is the date on which the principal amount of the bond is to be paid in full.

Key Takeaway: The bond issuer agrees to pay the investors the original sum loaned at the bond's maturity date. It is common however, that not all bonds reach their maturity, as when the issuer retires the bond before it matures.
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