The Required Rate of Return on a Bond Is

question 61

Multiple Choice

The required rate of return on a bond is

• A)the interest rate that equates the current market price of the bond with the present value of all future cash flows received.
• B)equivalent to the current yield for nonpar bonds.
• C)less than the E(r)for discount bonds and greater than the E(r)for premium bonds.
• D)inversely related to a bond's risk and coupon.
• E)None of these choices are correct.

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