Rate of return (in percentages) consists of___________?
Correct answer: A. Capital gain yield interest yield
- A. Capital gain yield interest yield
- B. Return yield + stable yield
- C. Return yield + unstable yield
- D. Par value + market value
Explanation
A bond’s percentage return combines the interest or coupon yield with the capital gain or loss yield. Thus, capital gain yield plus interest yield gives the total rate of return.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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