When Should an Investor Calculate Both Yield to Maturity and Yield

question 33

Multiple Choice

When should an investor calculate both yield to maturity and yield to call?

• A)Whenever there is a call provision
• B)When the sum of the present values of the interest payments exceeds the call price
• C)When the market price is greater than or equal to the call price
• D)Whenever the funds can be reinvested
• E)When interest rates increase above the coupon rate

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Definitions:

Test of Logical Strength

An assessment or evaluation of the cogency or persuasiveness of logical arguments based on their structure and premises.

Statistical Analyses

The techniques used to interpret, describe, and make inferences from data sets, often involving mathematical calculations.

Inductive Reasoning

A method of reasoning in which general conclusions are drawn from specific observations or instances.

Probabilistic Conclusions

Inferences or outcomes derived from reasoning that incorporate the principles of probability, often used in scenarios where outcomes are uncertain.