To Compute the Holding Period Return on a Bond Investment

question 98

Multiple Choice

To compute the holding period return on a bond investment, the investor should divide the purchase price of the bond into

• A) any increase or decrease in the bond's price.
• B) the annual coupon payment.
• C) the bond's yield to maturity.
• D) coupon payments received plus or minus any change in the bond's price.

---

Definitions:

Asymmetric Information

A situation where one party in a transaction has more or superior information compared to another, often leading to an imbalance in power or unfair advantages.

Health Care Buyers

Health care buyers are individuals or entities, such as insurance companies or government agencies, that purchase health care services on behalf of consumers.

Providers

Entities or individuals that offer a certain type of service or goods to the market, typically within the context of healthcare, utilities, or telecommunications.