The rate of return on a bond is the

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The rate of return on a bond is commonly referred to as its yield. It represents the total return an investor can expect to earn on the bond, including both its annual interest payment and any capital gains or losses upon sale or redemption. The discount rate, on the other hand, is the rate used to discount future cash flows in order to determine their present value. While the annual interest payment is a component of the bond's yield, it does not fully capture the total return on the investment.

The Rate of Return on a Bond Is the