A bond's promised rate of return will be

Question

Quizplus · Accepted Answer

A bond's promised rate of return is essentially the interest rate the issuer agrees to pay the bondholder, which is a fixed amount. This rate is what the issuer promises to pay, regardless of how the bond's actual market value fluctuates. Therefore, it is greater than or equal to its expected rate of return, which can vary based on market conditions and the issuer's performance. The expected rate of return takes into account the possibility of default or changes in market interest rates, which might lead to receiving less than the promised payments.

A Bond's Promised Rate of Return Will Be