Multiple Choice
Which one of the following statements is true of a bond's yield to maturity?
A) The yield to maturity of a bond is the discount rate that makes the present value of the coupon and principal payments equal to the price of the bond.
B) It is the annual yield that the investor earns if the bond is held to maturity, and all the coupon and principal payments are made as promised.
C) A bond's yield to maturity changes daily as interest rates increase or decrease.
D) All of the above are true.
Correct Answer:
Verified
Correct Answer:
Verified
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