What Formula Measure Would an Investor Use to Calculate the Yield

question 19

Multiple Choice

What formula measure would an investor use to calculate the yield on a 20-year bond with 10 years to maturity, if he or she only intends to hold the bond for 5 years?

• A)Anticipated realized yield
• B)Yield to call
• C)Current yield
• D)Yield to maturity
• E)Any one of the above will measure the yield

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Cost to Sellers

The expenses incurred by sellers in providing a good or service, including production costs, labor, materials, and overhead.

Value to Buyers

The maximum amount of money buyers are willing to pay for a good or service, reflecting the perceived utility or benefit derived from the purchase.

Cost to Sellers

The total expenses that a seller has to bear to produce and sell a product, including production, marketing, and distribution costs.