The Discount Rate That Makes the Present Value of a Bond's

question 5

Multiple Choice

The discount rate that makes the present value of a bond's payments equal to its price is termed the:

• A) rate of return.
• B) yield to maturity.
• C) current yield.
• D) coupon rate.

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Definitions:

Public Policy

Principles and standards considered to be in the interest of the public and used as a guide in legislative, judicial, or administrative actions.

Reasonable

Actions, decisions, or policies that are logical, fair, and sensible from an objective viewpoint.

Illegal Contract

A contract that is unenforceable by law because it involves activities that are against the law or public policy.

Restraint Trade

Legal provisions designed to prohibit or control practices that restrict free trading and competition between businesses.