If the holding period is equal to the term to maturity for a corporate bond, then the rate of discount represents the
A) coupon yield.
B) effective yield.
C) yield to call.
D) yield to maturity.
E) reinvestment rate.

Question

Quizplus · Accepted Answer

If the holding period is equal to the term to maturity, then the bond will be held until maturity and the rate of discount represents the yield to maturity. Yield to maturity is the total return anticipated on a bond if the bond is held until it matures.

If the Holding Period Is Equal to the Term to Maturity