- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 44. Introduction to Fixed-Income Valuation
- Subject 5. Yield Measures for Fixed-Rate Bonds
CFA Practice Question
The yield to maturity on a bond is ______.
A. below the coupon rate when the bond sells at a discount and above the coupon rate when the bond sells at a premium.
B. the interest rate that makes the present value of the payments equal to the bond price.
C. based on the assumption that all future payments received are reinvested at the coupon rate.
Explanation: It is the internal rate of return.
User Contributed Comments 7
| User | Comment |
|---|---|
| Shelton | (A) is wrong |
| alexloke | Really, Shelton? I didn't know. The answer obviosuly did say so... |
| Joel1980 | 'Obviosuly'? Nice - you taught him! |
| janis36 | Surely you can't be serious. |
| ascruggs92 | I am serious, and don't call me Shirley |
| Znanje35 | Shurlee |
| Znanje35 | Sure-LEE |