The Yield to Call Is a More Conservative Yield Measure

question 90

Multiple Choice

The yield to call is a more conservative yield measure whenever the price of a callable bond is quoted at a value

• A) Equal to or greater than par plus one year's interest.
• B) Equal to par.
• C) Equal to par less one year's interest.
• D) Less than par.
• E) Five percent over par.

---

Definitions:

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the real yield to lenders or investors.

Investment

The process of spending money to purchase assets with the expectation of generating future profits or income.

Public Saving

The difference between the government's tax revenues and its spending, excluding debt interest.

Tax Revenue

The income that is gained by governments through taxation.