Question
Corporate bonds would be included in the
held-to-maturity (HTM) portfolio that would make these securities more attractive for investors.What is the primary purpose of businesses holding Held-to-Maturity (HTM) securities?Solution
Securities that are bought by businesses with the intent to hold them until maturity are known as Held-to-Maturity (HTM) securities. They differ from trading securities or securities open for sale as they are not held until maturity. Companies mainly employ HTM securities to diversify their investment portfolios, insulate from interest rate Volatility, and create a modest, low-risk Capital Gain for a longer period. Debt instruments such as corporate or government Bonds typically make up the investments.
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