The Discount Rate That Makes the Present Value of a Bond's

question 74

Multiple Choice

The discount rate that makes the present value of a bond's payments equal to its price is termed the:

• A) dividend yield.
• B) yield to maturity.
• C) current yield.
• D) coupon rate.

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Definitions:

Income Effect

Variations in the income of an individual or an economy and the subsequent effects on the demand for goods or services.

Discrimination

Unfair or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.

Profitable

A state or condition of yielding a financial profit or gain; it is often considered after all expenses have been deducted.

Opportunity Cost

The cost of foregone alternatives; the value of the best alternative that is not chosen.