Before the maturity of a variable-rate demand obligation, an investor is entitled to receive what?

An investor in a variable-rate demand obligation (VRDO) is entitled to receive the par value plus accrued interest before maturity. This type of security allows investors to redeem the obligation at par value at specified intervals, often with interest that adjusts periodically based on a market index.

The par value represents the face value of the investment, which is the amount that will be returned to the investor upon redemption. Additionally, accrued interest is the interest that has accumulated on the obligation since the last interest payment was made. Collectively, receiving both the par value and the accrued interest ensures that the investor is compensated fairly for their investment up to the point of redemption.

Other options present misunderstandings: market value fluctuates based on market conditions and may not align with what the investor would receive at redemption; only receiving accrued interest would neglect the principal value of the investment; and dividend yield is relevant for stocks and not directly applicable to fixed-income instruments like VRDOs.