Join ExamsbookAnswer : 1. "equal to both the coupon rate / current yeild"
The yield to maturity on a discount bond is5
Q: The yield to maturity on a discount bond is
- 1equal to both the coupon rate / current yeildtrue
- 2less than the current yeild but greater than the coupon ratefalse
- 3greater than both the coupon rate / current yeildfalse
- 4equal to the current yeild but greater than the coupon ratefalse
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Answer : 1. "equal to both the coupon rate / current yeild"
Explanation :
Answer: A) equal to both the coupon rate / current yeild Explanation: Yield to maturity is a concept for fixed rate bonds and is the internal rate of return i.e. the rate at which future flows are discounted on a compound basis to give the present value of the bond including accrued interest.