Question

The price at which issuing company may repurchase the bond before maturity is known as?

A Maturity value Correct Answer Incorrect Answer
B Redemption value Correct Answer Incorrect Answer
C Face value Correct Answer Incorrect Answer
D Coupon value Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Redemption value is the price at which the issuing company may choose to repurchase a security before its maturity date. A bond is purchased "at a discount" if its redemption value exceeds its purchase price. It is purchased "at a premium" if its purchase price exceeds its redemption value.

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