Q607
If default probability is zero and bond is not called then yield to maturity is
A.
mature expected return rate
B.
lower than expected return rate
C.
higher than expected return rate
D.
equal to expected return rate
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
If default probability is zero and bond is not called then yield to maturity is equal to expected return rate. The return on an investment as estimated by an asset pricing model. It is calculated by taking the average of the probability distribution of all possible returns.