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Investors in the bond market require a return of 8.6 percent on a 10-year bond issued by Dell Industries. That means, they require to be able to earn on average 8.6 percent each year if they hold the bond
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Investors in the bond market require a return of 8.6 percent on a 10-year bond issued by Dell Industries. That means, they require to be able to earn on average 8.6 percent each year if they hold the bond until maturity. We call this 8.6 percent the bond's _______.

User Tim Van Laer
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1 Answer

13 votes
13 votes

Answer:

Yield to Maturity

Step-by-step explanation:

Yield to maturity is the correct answer because the average annual yield that a person expects to earn is called the yield to maturity. Or it is the total return on the bond if a person holds the bond till its maturity. Since 8.6 percent is the average return so this is a yield to maturity.

User Mikhas
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