The Yield to Maturity Assumes Which One of the Following

question 86

Multiple Choice

The yield to maturity assumes which one of the following?

• A)The bond is purchased at par value.
• B)All interest payments earn the latest rate of market interest.
• C)The bond is called on the earliest possible date.
• D)The bond is a pure discount bond.
• E)All coupon payments are reinvested at the yield to maturity rate.

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, leading to price stability for a particular good or service.

Efficiency

The optimum allocation of resources to achieve the best possible output or outcome with minimal waste or inefficiency.

Equality

A state or condition of being equal, especially in status, rights, and opportunities.

Total Surplus

The sum of consumer and producer surplus, representing the total benefit to society from a market transaction.