The Yield-To-Maturity of a Bond with a Finite Maturity Date

question 101

Multiple Choice

The yield-to-maturity of a bond with a finite maturity date is a function of all of the following variables except:

• A)the current price
• B)the required rate of return on the bond
• C)the uniform annual interest payments
• D)the maturity value

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Definitions:

Constant Dividend

A policy where a company pays out a fixed amount in dividends to shareholders on a regular basis, regardless of the company's earnings fluctuations.

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.

Annual Dividend

A yearly payment made by a corporation to its shareholders, often derived from profits.