Question

The yield to call Group of answer choices is important if interest rates have fallen is important if interest rates have risen equals the yield to maturity equals the current yield

Answer 1

Answer:

is important if interest rates have fallen.

Explanation:

In Finance, Yield to call (YTC) represents the return a bondholder (investor) receives if the bond is held until the call date before it reaches maturity.

Simply stated, Yield to call (YTC) is the amount of money an investor (bondholder) would earn if he or she held a bond until it was called before its maturity.

The yield to call is important if interest rates have fallen because bondholders or investors would be able to recall their old (existing) bonds and sell new bonds at the fallen (lower) rates.

Hence, Yield to call (YTC) allows the bondholders (investors) to redeem or recall their existing bonds while it avails the bond issuer the opportunity of repurchase the bonds or debt instruments.