The total return an investor would receive from income plus capital appreciation,assuming a bond is held to maturity,is called the:

Question

Quizplus · Accepted Answer

Yield to maturity represents the total return an investor would receive from income (in the form of coupon payments) plus capital appreciation (in the form of the bond's price increasing to par value at maturity). The other options are not applicable to bonds held to maturity: call premium only applies if a bond is called before maturity, current yield only calculates the bond's annual interest payments as a percentage of its current market price, and capital gains yield only reflects the change in price of the bond between purchase and sale.

The Total Return an Investor Would Receive from Income Plus