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Brut [27]
3 years ago
12

I purchase a 10 percent coupon bond. Based on my purchase price, I calculate a yield to maturity of 8 percent. If I hold this bo

nd to maturity, then my return on this asset is:_____.
A) 10 percent.
B) 8 percent.
C) 12 percent.
D) there is not enough information to determine the return.
Business
1 answer:
Vedmedyk [2.9K]3 years ago
8 0

Answer:

B) 8 percent.

Explanation:

The yield to maturity is the expected rate of return of a bonds if held until maturity.

We are asked precisely for what rate are we receiving if held at maturity so we receive the yield to maturity.

That is a rate at which the discounted coupon payment and maturity payment matches the price we urchase the bonds.

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Answer:

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