Question: It was emphasized in class that a bond's return, called its yield to maturity, is comprised of its current yield and its capital gains yield.

It was emphasized in class that a bond's return, called its yield to maturity, is comprised of its current yield and its capital gains yield. If the bond is selling at a premium, that is more than its $1,000.00 par value then the bond's capital gains yield is: Positive Negative

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

A sinking fund call on a bond O a. does not require the company to pay a small percentage of the issue every year O b.requires the company to pay an early-payment penalty to investors O c does not...

Question 8 1 pts Which of the following statements about a bond that sells for its par value is correct? The yield to maturity is comprised of a capital gains yield equal to the face value of the...

43. Which of the following statements is CORRECT? . If a coupon bond is selling at par, its current yield equals its yield to maturity, and its b. expected capital gains yield is zero. On an expected...

Which of the following statements is CORRECT? Select one: a. If a bond is selling at a discount, the yield to call is a better measure of the expected return than the yield to maturity. b. A bond's...

1. The underlying assumption of the dividend growth model is that a stock is worth: A. the same amount to every investor regardless of their desired rate of return. B. the present value of the future...

I'm sorry for the length of the question as my professor does long 5 part questions to help us better understand the concepts together. Thank you for your help in advance! A) Which of the following...

Bond Valuations over Time (use REMAINING TIME TO MATURITY for N as the bond moves CLOSER to Maturity) CALCULATE: YTM Current Yield Capital Gains Yield BOND Price. A company issued 25-year bonds AT...

Q1. Explain in words the four bonds summarized in the tables below. Discuss each bonds periods of maturity, coupon rate, current yield, capital gains yield, and total yield. (No calculations...

Consider three students with the following distributions of 24 quiz scores: Amanda: 8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8,8- Barney: 5, 6,6,6,6,7,7,7,7,7,7,7,8,8,8,8,8,8,8,9,9,9,9,10...

Guitar strings are often made of steel. What is the change in its length, if the temperature is increased by 5C? You may assume that the steel string is 0.75m long and it is intitally at room...

Many investors regularly contribute to an S&P ETF or index fund becasue the expense ratio is really low and the index typically out preforms approximately _ _ _ _ _ _ of all actively managed funds. ....

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".