He appropriate discount rate for valuing any bond is the

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Quizplus · Accepted Answer

The appropriate discount rate for valuing any bond is the yield that could be earned on alternative investments with similar risk and maturity. This is because the discount rate should reflect the opportunity cost of investing in that bond, which should be the return that could be earned on other investments with similar risk and maturity. The bond's coupon rate or coupon rate adjusted for inflation may be used to calculate the bond's value, but it would not be the appropriate discount rate to use for valuing the bond. The Treasury bill rate with a risk premium may be used to calculate the bond's value if the bond is considered to be riskier than a Treasury bill, but this would not necessarily be the appropriate discount rate to use for all bonds.

He Appropriate Discount Rate for Valuing Any Bond Is the