Question
Typically, the yield-to-maturity (YTM) on a corporate bond is not the same as its expected return. why?(Choose one) A. The YTM is greater than the
Typically, the yield-to-maturity (YTM) on a corporate bond is not the same as its expected return. why?(Choose one)
A. The YTM is greater than the expected return of a risky bond because the YTM is calculated using the promised cash flows, which are not necessarily the expected cash flows.
B. The YTM is what you will actually get, whereas the expected return is what is expected.
C. The IRR of the investment is not the yield, but the expected return is the actual realized return.
D. The expected return is greater than the YTM because the IRR of the bond exceeds the YTM.
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