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The yield-to-maturity assumes which one of the following? All coupon payments are reinvested at the yield-to-maturity...

The yield-to-maturity assumes which one of the following?

All coupon payments are reinvested at the yield-to-maturity rate.

The bond is a pure discount bond.

The bond is purchased at par value.

The bond is called on the earliest possible date.

All interest payments earn the latest rate of market interest.
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Answer #1

The answer is

All coupon payments are reinvested at yield to maturity rate

Yield to maturity is the effective rate of interest earned on a bond

It assumes that all coupons received are reinvested at yield to maturity rate

All other options are wrong

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