the rate of return to the buyer of the bond is called a. Yield-to-maturity b. current...

the rate of return to the buyer of the bond is called

a. Yield-to-maturity

b. current yield

c. market rate

d. coupon rate

e. call rate

Expert Solution

Answer

Coupon Rate

Reason:

> The coupon rate is the annual amount of interest that the owner of the bond will receive. To complicate things the coupon rate may also be referred to as the yield from the bond.

A bond investor is more likely to base a decision on an instrument's coupon rate.

> The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. It is the sum of all of its remaining coupon payments.

A bond trader is more likely to consider its yield to maturity.

> Call rate is the rate of interest on call loans, which are loans that are due for payment on demand.

> Current yield is an investment's annual income (interest or dividends) divided by the current price of the security. This measure examines the current price of a bond, rather than looking at its face value.

>The market rate for goods or services is the usual price charged for them in a free market.

jeff jeffy answered 1 year ago

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