CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

An investor purchases a 5% coupon bond providing a yield-to-maturity of 4% and maturing in three years for $102.80. At what rate must the coupon payments be reinvested to generate the 4% yield?
A. 3%
B. 4%
C. 5%
Explanation: The yield-to-maturity measure assumes that the coupon payments can be reinvested at an interest rate equal to the yield-to-maturity (in this case, 4%).

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