A redemption is the return of an investor's principal in a fixed-income security, such as a preferred stock or bond, or the sale of units in a mutual fund. Fixed-income securities are redeemed at par value on the maturity date, and called bonds are redeemed at a premium price above par. On the other hand, mutual fund investors redeem mutual funds shares, and the some mutual funds have minimum holding periods and back-end sales charges.
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