Comprehensive and Detailed Explanation From Exact Extract:
A corporate bond bought at a discount will provide a capital gain at maturity, as the investor receives the par value, which is higher than the purchase price. The feedback from the document states:
"Bond prices are quoted using an index with a base value of 100. A bond trading at 100 is said to be trading at face value, or par. A bond trading below par, say at a price of 98, is said to be trading at a discount… So if you buy a bond at a discount, at maturity, you will receive the par or face value. The difference between the discounted price and the par value received at maturity is considered a capital gain."
[Reference:Chapter 7 – Types of Investment Products and How They Are TradedLearning Domain:Understanding Investment Products and Portfolios, ]
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