Question

29) The rate of return required by investors in the market for owning a bond is called the: a) Coupon. b) Face value. c) Maturity d) Yield to maturity. e) Coupon rate.

Answer 1

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The rate of return the market for yield to maturity. investor called the required by the owning a bond is Coupon - gt is the inferest that the inves for receives periodically, ot can be annual, semi-annual quarterly , etc. on maturity, investor guranteed. - gt is the par value win receive it. af is face Value Maturity - It is the time period which investor will hold the bond and receive the coupon. yield to maturity - Return that investor requires. It is based on unrealistic assumptions and the promised ytm will be realized when the intermediate coupons are also reinvested at ytm rate. : Coupon rate - gt is the state which applies on face value and investor receives it periodically. e Coupon amount = Coupon rate & face value. Tower option d]