The Current Yield on a Bond Is a Good Approximation

question 69

True/False

The current yield on a bond is a good approximation of the bond's yield to maturity when the bond matures in five years or less and its price differs from its par value by a large amount.

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Definitions:

Market Share

The portion of a market controlled by a particular company or product.

HHI

The Herfindahl-Hirschman Index, a measure of market concentration to assess the competition level among firms.

Identical Firms

Companies that produce the same products or services, have the same production techniques, and face the same costs and market conditions.

Unconcentrated

Describes a market structure with many competitors, none of which have a significant share of the market.