Question
What is the term used to describe the rate of return
earned by an investor who purchases a bond and holds it until it matures?Solution
The term used to describe the rate of return earned by an investor who purchases a bond and holds it until it matures is "Yield to Maturity (YTM)." The YTM is the total return anticipated on a bond if it is held until it matures, taking into account the bond's current market price, its face value, its coupon rate, and the time remaining until maturity.
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