A$$ bond's yield to maturity is the$$ bond's:$($Select the best answer$$ below.$)$

A$.$

periodic return if it is held to maturity.

B$.$

annualized return if it is held to maturity.

C$.$

coupon rate plus the annualized return if it is held to maturity.

D$.$

coupon rate minus the annualized return if it is held to maturity.

Part $3$

If the selling price of the bond is greater than its par valueIf$$the$$selling$$price$$of$$the$$bond$$is$$greater$$than$$its$$par$$value$,$

$($Select the best answer$$ below.$)$

A$.$

then the yield to maturity will be equal to the coupon rate.

B$.$

then the yield to maturity will be less than its coupon ratethen$$the$$yield$$to$$maturity$$will$$be$$less$$than$$its$$coupon$$rate$.$

C$.$

then the yield to maturity will be more than the coupon ratethen$$the$$yield$$to$$maturity$$will$$be$$more$$than$$the$$coupon$$rate$.$

D$.$

the annualized return will equal the periodic return.

Part $4$

How is a$$ bond's yield to maturity affected for investors who buy that bond below par$$ value?$($Select from the$$ drop$-$down menus.$)$

When an investor buys a bond below its par$$ value, the yield to maturity is

$$

$$

lower

higher

than the coupon rate due to the combined effect of receiving periodic

$$

$$

dividend

coupon

payments and realizing a capital

$$

$$

gain

loss

when the bond matures at its face value.

Part $5$

Investing in bonds can be a strategic decision based on various financial$$ goals, including:$($Select the best answer$$ below.$)$

A$.$

desire for stable$$ income, beat the$$ S&P $500,$ and diversification.

B$.$

desire for stable$$ dividends, capital$$ preservation, and diversification.

C$.$

desire for stable$$ income, capital$$ preservation, and diversification.

D$.$

desire for higher$$ income, capital$$ preservation, and diversification.