Asked by
Donisha Williams
on Nov 08, 2024
Verified
As the yield to maturity increases, the:
A) Amount the investor is willing to pay to buy a bond decreases.
B) Longer the time to maturity.
C) Lower the coupon rate desired by that investor.
D) Higher the price the investor offers to buy a bond.
E) Lower the rate of return desired by the investor.
Yield To Maturity
The total return anticipated on a bond if it is held until the maturity date, considering all interest payments and the principal.
Investor
An individual or entity that allocates capital with the expectation of receiving financial returns, often involving equity ownership, debt purchases, or other financial instruments.
- Understand the elements that contribute to the yield of a bond and the determinants that affect the pricing of bonds.
Verified Answer
DM
Learning Objectives
- Understand the elements that contribute to the yield of a bond and the determinants that affect the pricing of bonds.