Question
Which of these is included in the calculation of a bond's yield to maturity?
Multiple select question.
Coupon rate
Current price
Par value
Number of bonds issued
Multiple select question.
Coupon rate
Current price
Par value
Number of bonds issued
Answers
GPT-4o mini
In the calculation of a bond's yield to maturity (YTM), the following factors are included:
1. **Coupon rate** - This affects the cash flows you receive from the bond.
2. **Current price** - The price at which the bond is currently trading influences the yield.
3. **Par value** - The bond's face value (or par value) is used to determine the final payment at maturity and affects yield calculation.
The **number of bonds issued** is not used in the calculation of an individual bond's yield to maturity.
So, the correct answers are:
- Coupon rate
- Current price
- Par value
1. **Coupon rate** - This affects the cash flows you receive from the bond.
2. **Current price** - The price at which the bond is currently trading influences the yield.
3. **Par value** - The bond's face value (or par value) is used to determine the final payment at maturity and affects yield calculation.
The **number of bonds issued** is not used in the calculation of an individual bond's yield to maturity.
So, the correct answers are:
- Coupon rate
- Current price
- Par value