When a Bond Trades at a Discount to Par, the Yield

question 19

True/False

When a bond trades at a discount to par, the yield to maturity on the bond will exceed the required return.
In bond valuation, "Yield to Maturity" and "Required Rate of Return" are synonymous, all other things equal.

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Definitions:

Straight-Line Depreciation

Depreciation method in which the amount taken to depreciation expense each year is constant and equal to 1/n times the depreciable amount, where n is the depreciable life of the asset.

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Opportunity Cost

The receipts from the next most valuable forgone alternative when making a decision or choice among many options.