What is the relationship between a bondholder's rate of return and the bond's yield to maturity if he does not hold the bond until it matures?
A)the rate of return will be lower than the yield to maturity.
B)the rate of return will be higher than the yield to maturity.
C)the rate of return will equal the yield to maturity.
D)there is no predetermined relationship between the rate of return and the yield to maturity.

Question

Quizplus · Accepted Answer

The bondholder's rate of return will depend on the purchase price, selling price, and any coupon payments received during the holding period. It is not guaranteed to be equal to, higher than, or lower than the bond's yield to maturity.

What Is the Relationship Between a Bondholder's Rate of Return