The larger the investor's ____ relative to the ____, the larger the ____ of a bond with a particular par value.

Question

Quizplus · Accepted Answer

The required rate of return is the rate of return that an investor expects to earn on an investment. The discount rate is the rate of return that an investor uses to calculate the present value of future cash flows. The discount is the difference between the par value of a bond and its market price. The larger the investor's required rate of return relative to the discount rate, the larger the discount of a bond with a particular par value.

The Larger the Investor's ____ Relative to the ____, the Larger

The Larger the Investor's Relative to the , the Larger