The "EST SPREAD" Shown in the Wall Street Journal Listing

question 29

Multiple Choice

The "EST SPREAD" shown in The Wall Street Journal listing of corporate bonds represents the estimated:

• A) yield to maturity.
• B) difference between the current yield and the yield to maturity.
• C) difference between the bond's yield and the yield of a particular Treasury issue.
• D) range of yields to maturity provided by the bond over its life to date.
• E) difference between the yield to call and the yield to maturity.

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Definitions:

Sharpe Measure

A method to assess the performance of an investment by adjusting for its risk, comparing the excess return over the risk-free rate to the standard deviation of returns.

Dollar-Weighted

A method of calculating an investment's return that takes into account the time and amount of each cash flow.

Time-Weighted

A method used in finance to measure the performance of investments by calculating the compound growth rate of the investment over a specific period, regardless of external contributions or withdrawals.

Pension Fund

A type of investment pool established to manage and distribute retirement benefits for its members.