For an Investor Who Plans to Purchase a Bond Maturing

question 166

Multiple Choice

For an investor who plans to purchase a bond maturing in one year, the primary consideration should be

• A) interest rate risk.
• B) changes in the risk of the issue.
• C) yield to maturity.
• D) coupon rate.

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Definitions:

Combined Turnover

A measure of a company’s ability to use its assets and liabilities effectively to generate sales, combining inventory turnover with accounts receivable turnover.

Fixed Expenses

Expenses that remain constant regardless of the amount of production or business operations, like lease payments or wages.

Return On Investment (ROI)

A financial metric used to evaluate the efficiency or profitability of an investment, calculated as the return relative to the investment's cost.

Return On Investment (ROI)

A financial metric used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments, calculated by dividing net profit by the cost of investment.