What Does the Yield to Maturity on Bonds Refer To

question 28

Multiple Choice

What does the yield to maturity on bonds refer to?

• A)the number of years before the bond's maturity
• B)the amount of interest income received by investors each year
• C)the promised rate of return on the bonds if purchased at current price and held to maturity
• D)the capital gain that investors can get in relation to the average industry price of the bonds

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Definitions:

Industry Average

A statistical measure that represents the central tendency or typical value of a set of figures in a particular industry, often used for benchmarking.

Insolvency

The state in which an individual or entity cannot meet its financial obligations as debts become due.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of a business.

Benjamin Graham

Widely recognized as the father of value investing, he was an economist, professional investor, and Columbia Business School professor.