A market interest rate for specific type of bond is classified as bond's_____________?
Correct answer: D. Required rate of return
- A. Required rate of earning
- B. Required option
- C. Required rate of redemption
- D. Required rate of return
Explanation
The required rate of return is the market return investors demand for a bond’s risk, maturity, liquidity and other characteristics. It is the benchmark used to value that specific bond’s cash flows.
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