For a given issuer, the secured bond's yield to maturity will be
A) equal to that of the issuer's debentures.
B) less than that of the issuer's debentures.
C) greater than that of the issuers debentures.

Question

Quizplus · Accepted Answer

Secured bonds are backed by collateral, making them less risky to investors than debentures, which are unsecured. Therefore, investors are willing to accept a lower yield to maturity on secured bonds compared to debentures.

For a Given Issuer, the Secured Bond's Yield to Maturity