CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Which yield measure is the internal rate of return that makes the present value of cash flows equal to the bond price?

A. Market discount rate
B. Yield-to-maturity
C. Spot rate
Correct Answer: B

Yield-to-maturity is the promised rate of return.

User Contributed Comments 2

User Comment
brookew what's the difference between YTM and market discount rate? I thought YTM was a market discount rate since it is in the denominator of DCF models
khalifa92 YTM= IRR that makes discounted cash flows = bond price
r = required market interest rate for a given risk.
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