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:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Excise Tax

A tax levied on specific goods, services, or activities, such as gasoline, cigarettes, or alcohol, often to discourage consumption or generate revenue.

Recreational Fishing Boats

Boats specifically designed and utilized for the purpose of fishing for leisure or sport, not commercial fishing.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied.