The Yield to Maturity on a Bond

question 30

Multiple Choice

The yield to maturity on a bond

• A) is fixed in the indenture.
• B) is lower for higher-risk bonds.
• C) is the required return on the bond.
• D) is generally equal to the coupon interest rate.

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Definitions:

Double-Entry Accounting

A bookkeeping system that records each transaction in two accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.

Transaction Recorded Twice

This refers to a bookkeeping error where a financial transaction is mistakenly entered into an accounting system more than once, potentially distorting financial statements.

Liabilities

Debts or financial responsibilities that a company has towards others, requiring settlement via the transfer of economic resources over a period.

Debits

Entries in accounting that represent an increase in assets or expenses, or a decrease in liabilities, equity, or income.