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What is the yield to maturity of a bond?

  1. A The total return if held to maturity with coupons reinvested at that rate
  2. B The annual coupon rate
  3. C The current yield
  4. D The credit spread
Answer

The total return if held to maturity with coupons reinvested at that rate

The reinvestment assumption is why realised return often differs from the YTM quoted at purchase.

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