When computing yield to maturity, the implicit reinvestment assumption is that the interest payments are reinvested at the
A)coupon rate.
B)current yield.
C)yield to maturity at the time of the investment.
D)prevailing yield to maturity at the time interest payments are received.

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) calculation assumes that all coupon payments are reinvested at the same rate as the YTM itself, not at the coupon rate, current yield, or the prevailing YTM at the time the interest payments are received.

When Computing Yield to Maturity, the Implicit Reinvestment Assumption Is