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9 months ago

TRUE/FALSE in valuation analysis, undervalued bonds are bonds in which the expected ytms are lower than the prevailing ytm.

1 answer:

3 0

If the bond's valuation is lower than the market price, you should buy it because the bond is undervalued. Additionally, the bond is overvalued and should be sold if the market price is lower than the bond price.

<h3>What is the formula for YTM?</h3>

The total rate of return that a bondholder anticipates earning if the bond is held until maturity is referred to as YTM in the context of bonds. A single Bond's YTM formula is as follows:[Annual Interest plus [(FV-Price)/Maturity]] / [(FV + Price)/2] is the yield to maturity.

<h3>What is the acronym YTM?</h3>

yield to maturity (YTM) is an estimate of a portfolio's return. It accepts that the purchaser of the security will hold it until its development date, and will reinvest each premium installment at a similar financing cost. As a result, the coupon rate is taken into account when calculating yield to maturity. The redemption yield is another name for YTM.

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