The Value of a Bond Can Be Calculated Several Different

question 18

Multiple Choice

The value of a bond can be calculated several different ways, depending on the investor's objectives. Conservative, income- oriented bondholders will typically use

• A) holding period return, whereas aggressive bond traders are likely to use realised yield.
• B) promised yield, whereas aggressive bond traders are likely to use expected return.
• C) realised yield, whereas aggressive bond traders are likely to use holding period return.
• D) expected return, whereas aggressive bond traders are likely to use promised yield.

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Definitions:

Machine-Hours

A measure of the amount of time a machine is operated, used for allocating machine-related costs to individual units of production.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity base, such as labor hours or machine hours.

Machine-Hours

A measure of the amount of time a machine is operated within a given period.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process.