Ask Question
BusinessBusiness
5 October, 07:53

Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10 percent coupon bond sells at par. Two years from now, the required return on the same bond is 8 percent. What is the coupon rate on the bond? What is the YTM on the bond?

+3
Answers (1)
  1. 5 October, 08:16
    0
    The yield to maturity on a bond is the same thing as the required return. The YTM and the coupon rate is a totally different thing. The coupon rate is the interest which is computed on the principal amount whereas yield to maturity is a rate which is held at the maturity and its rate is also generated in maturity date.

    So, in the given case, the Coupon rate is 10% and the YTM is 8% as it reflects the maturity i. e two years from now
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which of the following shifts short-run aggregate supply left? Group of answer choices a. an increase in price expectations b. an increase in the actual price level c. a decrease in the money supply d. a decrease in the price of oil
Answers (1)
Haverton is studying whether to drop a product because of ongoing losses. Costs that would be relevant in this situation would include variable manufacturing costs as well as:A. factory depreciation. B. avoidable fixed costs. C.
Answers (1)
The primary difference between variable costing and absorption costing is (A) in absorption costing, fixed selling and administrative costs are product costs. (B) in variable costing, variable selling and administrative costs are product costs.
Answers (1)
Dollywood Corporation accumulates the following data concerning a mixed cost, using miles as the activity level.
Answers (1)
Eddie has an extra $5,000 that he would like to invest in the stock market. He decides he would like to buy stock securities. Stock is:
Answers (1)
New Questions in Business
The fundamental relationship between savings and investment spending in an economy is that: A. savings will increase as investment spending decreases. B. investment spending and savings are always equal. C.
Answers (1)
The best explanation of why Gulf airlines are giving U. S. legacy carriers stiff competition is that the Gulf carriers: A. offer more special deals to business travelers than do the U. S. legacy carriers. B. have taken advantage of U. S.
Answers (1)
It costs Fortune Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 1,000 scales at $15 each.
Answers (2)
An American manufacturer has been asked to provide construction equipment to a foreign government. The contract is for a sizable amount, so the manufacturer wants to protect itself should the foreign government refuse to pay for the equipment once
Answers (1)
Use the following information to answer the next three questions. Periods Future Value of $1 at 12 Percent Future Value of Ordinary Annuity of $1 at 12 Percent Present Value of $1 at 12 Percent Present Value of Ordinary of $1 at 12 Percent 1 1.120 1.
Answers (1)
Home » Business » Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10 percent coupon bond sells at par. Two years from now, the required return on the same bond is 8 percent.
Sign Up Forgot Password?