Two investors are each issued one bond with the same face value, maturity date, and yield. After both bonds have reached maturity, it is discovered that one of the bondholders received a greater total return on her investment. If all expected payments were received, which of the following could explain the difference in return?
1 answer
The bond with the higher return may have had a lower purchase price than the other bond. This would result in a higher percentage return, even if the face value, maturity date, and yield were all the same.
4 answers