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On the maturity date of a bond, the bond owner receives: Group of answer choices a coupon payment only a coupon payment plus the purchase price the purchase price only a coupon payment plus the face value the face value only

Question

On the maturity date of a bond, the bond owner receives:

Group of answer choices

a coupon payment only

a coupon payment plus the purchase price

the purchase price only

a coupon payment plus the face value

the face value only

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Solution

On the maturity date of a bond, the bond owner receives:

a coupon payment plus the face value

This is because on the maturity date, the bond issuer has an obligation to pay the bondholder the face value of the bond. This is the amount that was initially invested, also known as the principal. In addition to this, the bondholder also receives the final coupon payment. Coupon payments are the interest payments that the bondholder receives periodically while they hold the bond.

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