Question: explain in your own words what the word expected in the term expected cash flows means, what cash flows an investor expects to receive

explain in your own words

  • what the word "expected" in the term "expected cash flows" means,
  • what "cash flows" an investor expects to receive from a bond,
  • what the third factor is and its relevance in bond valuation, ie. which part of the bond valuation formula incorporates this third factor?

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