One Way to Check the Accuracy of the Expected Return

question 48

True/False

One way to check the accuracy of the expected return on bonds is to compare the expected return to the YTM on recently-issued bonds with similar characteristics and risks.

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Definitions:

Automatic Response

A reflexive or instinctual reaction to a stimulus that occurs without conscious thought or intention.

Associative Learning

The way an individual comes to understand the relationship between two indications or between a behavior and its repercussion.

Classical Conditioning

A learning process that creates associations between a naturally occurring stimulus and a previously neutral stimulus.

Operant Conditioning

An educational technique that influences the strength of a behavior by awarding reinforcements or imposing penalties.