Question

Your answer is incorrect. The bond rate is the amount that an issuing unit is obligated to pay on the par value of the bond during the interim between the date of issuance and the date of redemption. The issuing organization of a bond is required to _____ the bond at face or par value upon its maturity.

Answer 1

Answer:

redeem

Explanation:

Bond redemption simply refers to paying the debt that the bond represents. A company must redeem a bond at maturity date, but it can also redeem it before maturity date. When a company carries out an early redemption of bonds, it will generally pay above face or par value. This happens usually when the coupon rate paid by the bond is higher than market interest, and the company believes that it can obtain funds at a lower interest rate.