Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 7 of 9
The yield to maturity is the rate that equates ______.
B. the present value of the expected cash flows with the purchase price
C. the present value of the reinvested income with the principal repayment
A. the present value of the expected cash flows with the principal repayment
B. the present value of the expected cash flows with the purchase price
C. the present value of the reinvested income with the principal repayment
User Contributed Comments 4
| User | Comment |
|---|---|
| danlan | YTM considers coupon, reinvestment income, ... or in another word, the whole discounted cash flow. |
| EminYus | it considers the capital gain/loss too |
| gill15 | Confused with this. Isn't the Purchase price exactly the same as the principal? Or is principal value the maturity value? It must be otherwise it wouldnt make sense. I think I remember reading that before. |
| johntan1979 | gill15, the principal is the par value, which is repaid in full at maturity. |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
calculate annual yield on a bond for varying compounding periods in a year
CFA® 2025 Level I Curriculum, Volume 4, Module 7.