Which of the following statements concerning the YTM of a default-risk-free bond is most accurate? The YTM
Question:
Which of the following statements concerning the YTM of a default-risk-free bond is most accurate? The YTM of such a bond:
A. Equals the expected return on the bond if the bond is held to maturity.
B. Can be viewed as a weighted average of the spot rates applying to its cash flows.
C. Will be closer to the realized return if the spot curve is upward sloping rather than flat through the life of the bond.
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B is correct The YTM is the discount rate that wh...View the full answer
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