A Bond's Yield to Maturity Depends Upon All of the Following

question 63

Multiple Choice

A bond's yield to maturity depends upon all of the following except:

• A) the individual investor's required return.
• B) the maturity of the bond.
• C) the coupon rate.
• D) the bond's risk as reflected by the bond rating.

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Definitions:

Tax-exempt

Income or transactions that are legally excluded from taxation.

Economic Benefit

The advantage or gain received from a financial transaction or situation, which may have tax implications or influence fiscal decisions.

Nontaxable Return of Capital

A payment received from an investment that is not taxed because it is considered a portion of the original investment's cost being returned to the investor.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.