The Rate of Return on a Security Is The

question 83

Multiple Choice

The rate of return on a security is the:

• A)interest rate that a security pays over its life.
• B)interest rate that equates the current outflow to acquire the security with its current price.
• C)capital gains rate that a security promises over its life.
• D)interest rate that makes the present value of the security's expected cash flows equal to its price.

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Definitions:

Assignee

A person or entity to whom rights or interests have been transferred by another, known as the assignor.

Contractual Rights

Legal rights granted to parties within a contract, allowing them to demand the performance of certain duties outlined in the agreement.

Assignor

An assignor is a party that transfers rights or interests in a contract or property to another party, known as the assignee.

Negotiable Instruments

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, which can be transferred to another party.