CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

When evaluating bonds it is helpful to understand that ______ and ______ will always be the same.
A. current yield; yield to maturity
B. yield to maturity; yield to call
C. yield to maturity; internal rate of return
Explanation: Yield to maturity is the internal rate of return or true yield on a bond. It is the interest rate (i) at which you can discount future coupon payments (Ct) and maturity value (Pn) to arrive at the current value of a bond (v). It is synonymous with market rate of interest.

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