In an efficient market,two investors may agree on the amount and timing of a bond's expected cash flows and also on the bond's risk level,as measured by its debt rating,and still determine two different values for the bond.

Question

Quizplus · Accepted Answer

Even if investors agree on the expected cash flows and risk level of a bond, they may still value it differently due to differences in their required rates of return, tax considerations, or other personal preferences.

In an Efficient Market,two Investors May Agree on the Amount