Which of the following is the primary reason why the realized yield on a bond differs from the yield-to-maturity?
I. Purchasing a bond at a value other than par
II. Selling prior to maturity at a value other than par
III. Having coupon payments semiannually rather than annually
IV. Reinvesting coupon payments at current market rates
A) III
B) I and III
C) II and III
D) I and IV
E) II and IV
Correct Answer:
Verified
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