Which of the Following Is NOT an Assumption Made for the Calculation

question 11

Multiple Choice

Which of the following is NOT an assumption made for the calculation of the yield to maturity of a bond?

• A)The bond is held to maturity.
• B)The coupons are reinvested at the yield to maturity.
• C)The coupons and face value are paid as stipulated in the contract.
• D)The bond is purchased at par.

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Definitions:

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, commonly the mean, median, or mode.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values in a data set differ from the mean.

Computing Mean

The process of calculating the average value of a set of numbers by adding them together and dividing by the quantity of numbers.

ΣX / N

The formula for calculating the mean of a set of data, where ΣX is the sum of all data points and N is the number of data points.