The Yield to Maturity of a bond is the same as_____________?
Correct answer: B. The bonds internal rate of return
- A. The present value of the bond
- B. The bonds internal rate of return
- C. The future value of the bond
- D. None of these Hire An Accountant
Explanation
Yield to maturity is the discount rate that makes a bond's current price equal to the present value of its future payments, so it is the bond's internal rate of return. It is not itself the bond's present or future value.
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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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