Question

.

What is the annual rate of return on a bond bought on the open market called?


par value

yield

maturity

coupon rate

Answer 1

Yield is the annual rate of return on a bond bought on the open market.

Step-by-step explanation:

Yield in case of bonds represents the annual return on an investment. It depends on both the interest promised or the coupon payment and the bond's purchase price.

Usually, although the coupon rates of bonds are fixed, its price changes or fluctuates continuously in connection to the changes in interest rates on the economy, time to maturity, demand for the instrument, and that bond's credit quality.

In return, After bonds are issued, they are traded at discounts or premiums to their face values; until they are matured and return to the full face value.

Click to let others know, how helpful is it

hi

Answer 2

Yield is the annual rate of return on a bond bought on the open market.

Step-by-step explanation:

Yield in case of bonds represents the annual return on an investment. It depends on both the interest promised or the coupon payment and the bond's purchase price.

Usually, although the coupon rates of bonds are fixed, its price changes or fluctuates continuously in connection to the changes in interest rates on the economy, time to maturity, demand for the instrument, and that bond's credit quality.

In return, After bonds are issued, they are traded at discounts or premiums to their face values; until they are matured and return to the full face value.