The yield to call (YTC)is:

Question

Quizplus · Accepted Answer

The yield to call (YTC) is the yield that an investor would expect to make if he or she bought the bond at the current price and held it to call date and received the call price. It differs from the yield to maturity (YTM) as it takes into account that the bond may be called before maturity, and therefore the investor may not receive all the promised payments on their scheduled dates. The YTC is the return an investor would expect if the bond is called before maturity, and therefore it reflects the opportunity cost of forgone coupon payments. Therefore, option B is the best choice as it accurately describes the YTC.

The Yield to Call (YTC)is