Respuesta :
The answer is: B The issuer will pay you back, plus interest.
Prior to the purchase of the bond, the bond issuer will specify the interest rates of the bonds and the maturity dates of the bond.
The bond itself can be sold to another persons, but the interest revenue would not be paid by the issuer before the maturity date.
When you finally enter the maturity date, the issuer of the bond would pay back the amount of money on the bond plus interests to the last legal holder of the bond
Option B is correct.
The issuer will pay back the principal along with interest.
Further Explanation:
Bond:
Bond is a financial instrument that is used for raising the funds from the outside of the entity. The bond is a loan agreement between the issuer and the bondholder where the issuer borrows the funds from the bondholder. The issuer has to pay the principal and the interest on the bond to the bondholder. Bond has a maturity date on which the issuer has to pay the principal (borrowed funds). Generally, the issuer pays the interest on the bond during the tenure of the bond.
Payment on the due date of the bond:
The issuer would pay principal and interest at the time of due date.
The issuer issues the bond with a condition that he would pay the borrowed funds along with the interest on the maturity date. A bond becomes due on its maturity date. So, at the time of the due date, the issuer would pay the principal amount and the interest amount to the bondholder.
A.
The issuer will pay you back, minus interest: This is an incorrect option. The issuer has to pay the interest along with the interest. The issuer is liable for paying the interest to the bondholder.
B.
The issuer will pay you back, plus interest: This is the correct option. The issuer is liable for paying the interest and the principal to the bondholder.
C.
You pay it back to the issuer, plus interest: This is an incorrect option. The bondholder is not liable for the payment of the bond. The bondholder is the lender so he would receive the principle and the interest at the due date.
D.
You pay it back to the issuer, minus interest: This is an incorrect option. The bondholder is entitled to receive the interest on the money that is lent to the issuer along with the principal amount.
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Answer details:
Grade: Senior School
Subject: Finance
Chapter: Bonds & Debentures
Keywords: Bond, payable, loan, due date, maturity date, principal, interest, interest rate, happens, bond, becomes due, the issuer, pay you back, minus interest, plus interest. Pay, it back, you pay it, back to the issuer, minus interest.
