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Which one of the following statements is correct? Investors know the rate of return they will earn with certainty provided they hold bonds until they
Which one of the following statements is correct?
Investors know the rate of return they will earn with certainty provided they hold bonds until they mature.
Realized yields generally equal promised yields as long as a bond is not called.
Reinvestment risk causes realized yields to differ from promised yields.
Redeeming a bond early helps ensure an investor earns the promised yield.
Realized yields cannot exceed promised yields.
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