A buy-and-hold investor purchases a fixed-rate bond at a discount and holds the security until it matures.

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A “buy-and-hold” investor purchases a fixed-rate bond at a discount and holds the security until it matures. Which of the following sources of return is least likely to contribute to the investor’s total return over the investment horizon, assuming all payments are made as scheduled?

A. Capital gain

B. Principal payment

C. Reinvestment of coupon payments

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Related Book For  answer-question

Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

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