Question 41
MediumOriginal questionMatch each bond term in List I with its meaning in List II.
| List I | List II |
|---|---|
| A. Face value | I. The day the bond is repaid |
| B. Coupon rate | II. The amount repaid to the holder at the end |
| C. Maturity date | III. The return earned by holding the bond to the end |
| D. Yield to maturity | IV. The yearly interest as a share of face value |
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
The face value is repaid on the maturity date; the coupon rate fixes the yearly interest on it.
The yield to maturity is the rate of return a buyer earns at today's price, held to the end.
- Concept
- Bond terms
- Typical timeTypical
- 120 s
- Your timeYours
- —
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