When a Treasury note or bond matures, the buyer receives the full face value. True or False?

When a Treasury note or bond matures, the buyer receives the full face value. True or False?

• A. True
• B. False
• C. Only for notes
• D. Only for bonds

Answer: (A)

At maturity, the investor is repaid the face (par) value of the security. For a standard Treasury note or bond, the principal is fixed and paid back when it matures, while the coupon payments are separate interest that’s paid periodically over the life of the instrument. You can buy the security for more or less than its par value, but you still receive the par value at maturity, with any gain or loss from the price difference realized through the coupons plus the principal repayment.

At maturity, the investor is repaid the face (par) value of the security. For a standard Treasury note or bond, the principal is fixed and paid back when it matures, while the coupon payments are separate interest that’s paid periodically over the life of the instrument. You can buy the security for more or less than its par value, but you still receive the par value at maturity, with any gain or loss from the price difference realized through the coupons plus the principal repayment.