The Yield to Maturity on Long-Term Bonds

question 47

Multiple Choice

The yield to maturity on long-term bonds

• A) is equal to the current yield if the bond is selling for face value.
• B) is equal to the coupon rate on the bond.
• C) is equal to the net present value of the bond's future cash flows.
• D) is set by the indenture agreement and will not change over the life of the bond.

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Definitions:

Degrees Of Freedom

The quantity of unique variables or figures permissible in a statistical distribution adhering to set restrictions.

Chi-squared Test

A statistical method used to determine if there is a significant association between two categorical variables.

Null Hypothesis

A theory positing no substantial variance between designated groups, attributing any noted disparity to errors in sampling or experimentation.

Normal Distribution

A probability distribution, symmetric around the mean, shows that datasets close to the mean are encountered more often than ones farther away.