New Enroll in RBI Grade B New Batch - Starts on May 21

    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?
    A Intrinsic Value Correct Answer Incorrect Answer
    B Coupon Rate Correct Answer Incorrect Answer
    C Redemption Value Correct Answer Incorrect Answer
    D YTM Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    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.

    Practice Next

    Relevant for Exams: