Also known as a principal, what amount is repaid to the investor at maturity?

Also known as a principal, what amount is repaid to the investor at maturity?

• A. Par Value
• B. Coupon
• C. Maturity
• D. Yield

Answer: (A)

Par value, also called face value, is the amount repaid at maturity. This is the principal—the initial amount you invest—on which coupon payments are based. The coupon represents the periodic interest you receive, calculated as a percentage of the par value. The maturity date is simply when that principal repayment occurs, bringing the investment to a close. Yield measures the overall return you earn, taking into account the purchase price, coupons, and the final repayment, and it can differ from the coupon rate.

Par value, also called face value, is the amount repaid at maturity. This is the principal—the initial amount you invest—on which coupon payments are based. The coupon represents the periodic interest you receive, calculated as a percentage of the par value. The maturity date is simply when that principal repayment occurs, bringing the investment to a close. Yield measures the overall return you earn, taking into account the purchase price, coupons, and the final repayment, and it can differ from the coupon rate.