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Maturity refers to the date on which a financial instrument, such as a bond or loan, must be repaid in full, including any outstanding interest. At maturity, the issuer of the security returns the principal amount to the investor, and the obligation is considered fulfilled. The maturity date is a critical factor in determining the interest rate, risk, and duration of an investment. Short-term instruments have a maturity of less than one year, while long-term instruments may have maturities of several decades.
A corporate bond with a face value of $1,000 and a maturity date of December 2025 will return the principal amount to the bondholder at that time.
• Refers to the date when a financial instrument must be repaid in full, including interest.
• Maturity is a critical factor in determining interest rates, risk, and investment duration.
• Short-term instruments have maturities of less than one year, while long-term instruments can last several decades.
Maturity refers to the date when a financial instrument, such as a bond or loan, must be repaid in full.
The maturity of an investment influences its interest rate, risk, and duration, with longer maturities typically involving higher risk.
Short-term instruments, like Treasury bills, have maturities of less than one year, while long-term bonds can have maturities of 10 or more years.
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