Which of the Following Is NOT a Definition of Yield

question 54

Multiple Choice

Which of the following is NOT a definition of yield to maturity?

• A) discount rate that equates present value of future cash flows with a bond's price.
• B) investors' required rate of return on a bond investment.
• C) return that an investor will earn if they buy the bond for its market price and hold it until maturity.
• D) discount rate that equates present value of future cash flows with a bond's face value.

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Definitions:

Numeraire Good

A benchmark or standard commodity against which the relative price of all other goods and services is measured in an economy.

Initial Endowment

The initial set of assets, goods, or resources that individuals or entities possess before entering into any economic transactions or exchanges.

Pareto Optimal Allocation

An economic state where resources are allocated in such a way that it is impossible to make any individual better off without making at least one individual worse off.

Utility Function

A mathematical representation of how a series of choices align with an individual's preferences, used in economics to model satisfaction or happiness.