What is the impact of default risk on the price of a bond near its maturity date?

The impact of default risk on the price of a bond near its maturity date depends on several factors. If a bond is at a high risk of default, investors may demand a higher yield to compensate for the added risk. This increase in yield may lead to a decrease in the bond's price, which can be more significant for longerterm bonds than shorterterm bonds.

As a bond approaches its maturity date, the impact of default risk on its price may be reduced. This is because the amount of time left for the issuer to default decreases, which decreases the probability of default. Consequently, the yield required by investors may decrease, resulting in an increase in the bond's price.

It is important to note that the impact of default risk on a bond's price near its maturity date can be influenced by other factors, such as changes in interest rates, the financial health of the issuer, and market conditions.