Assume a bond has been owned by four different investors during its 20-year history. Which one of the following is most apt to have been different for each of these owners?

Question

Quizplus · Accepted Answer

Yield to maturity (YTM) is the expected return on a bond if it is held until maturity, and it fluctuates over time as market interest rates change. Therefore, the YTM at the time each of the four investors purchased the bond would have been different, and could have also affected their decision to buy or sell the bond. The coupon rate is set when the bond is issued, and generally remains the same throughout the bond's life. Coupon frequency may vary but is usually specified in advance, and the par value is set when the bond is issued and does not change.

Assume a Bond Has Been Owned by Four Different Investors