The yield to maturity on a bond is: I. Above the coupon rate when the bond sells at a discount and below the coupon rate when the bond sells at a premium II. The discount rate that will set the present value of the payments equal to the bond price III. Equal to the true compound return on investment only if all interest payments received are reinvested at the yield to maturity

The yield to maturity on a bond is:


I. Above the coupon rate when the bond sells at a discount and below the coupon rate when the bond sells at a premium.


II. The discount rate that will set the present value of the payments equal to the bond price.


III. Equal to the true compound return on investment only if all interest payments received are reinvested at the yield to maturity.



A. I only

B. II only

C. I and II only

D. I, II, and III


Answer: D


Finance

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