A bond is a fixed-income security that represents a loan made by an investor to a borrower. Investors purchase bonds to earn interest over time and to eventually receive their principal back at maturity. The two primary components of a bond are its coupon payments and its face value.

In bond markets, the initial offering of bonds is known as the primary market, while the buying and selling of bonds after they have been issued occurs in the secondary market. Understanding the basic functions and markets for bonds is essential for investors.

Which of the following statements accurately describes a key feature of the bond market?