A Bond's Yield Is

question 26

Multiple Choice

A bond's yield is

• A) a periodic fixed payment made to a bondholder expressed as a percent of its face value.
• B) the amount that must be repaid to the bondholder upon its maturity.
• C) the date when the face value must be paid to the bondholder.
• D) the current annual return to a bond.

---

Definitions:

Required Rate of Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cash Flows

The net amount of cash and cash equivalents being transferred into and out of a business.

Accrual Income

This refers to the income that is earned in a fiscal period but not received within the same period.